By Tsvetana Paraskova of OilPrice.com
Crude oil production at Libya’s largest oilfield, Sharara, has slumped over the past day after an armed military group closed a valve on the pipeline that carries crude oil from the field to the Zawiya port for exports, in yet another global supply scare amid ongoing disruptions in the Middle East.
An armed group has closed Valve n.7 on the pipeline, Libya’s National Oil Corporation (NOC) said, adding that the closure caused a pressure buildup within the crude oil pipeline, leading to a significant reduction in production at the Sharara field.
The field is operated by Akakus Oil Operations, and its production is being shipped through the pipeline to the Zawiya port for exports.
The Libyan state oil firm warned that “the continued closure of Valve No. 7 will inevitably halt production, transportation, and export operations at the Sharara field.”
If the shutdown continues, NOC said it may be compelled to declare force majeure on Sharara output and exports.
“This would directly harm the national economy by reducing state revenues, especially given rising global oil prices, and would expose the oil transport system and its facilities to technical and operational risks,” NOC said.
The Sharara oilfield is estimated to have produced about 340,000 barrels per day (bpd) of crude oil before the incident.
Following the closure of the valve and the forced reduction of production, crude output at Sharara has now slumped to about 120,000 bpd, according to various estimates.
Libya’s fresh supply scare comes amid squeezed global oil supply as shipments through the Strait of Hormuz remain uneven and uncertain, and the Yanbu exports out of Saudi Arabia’s Red Sea coast are still offline, following the drone attack on the East-West pipeline on September 10.
Oil prices rose in Asian trade on Tuesday, following two days of declines, as the market weighs diplomacy hopes against supply-side risks.
Tyler Durden Tue, 09/22/2026 - 13:40Ahead of today's auction, with yields sliding early in the day tracking the drop in oil tick-for-tick, some speculated that participants in today's sale of $69BN in 2 year notes would need a modest concession to show enthusiasm for the auction. And even though yields did push wider until the 1pm stop, it appears it was not enough and the auction was notably on the weak side.
Starting at the top, the high yield was 4.787%, a big jump from last month's 4.204% and the highest since June 24, largely thanks to last week's rate hike. To be sure, there is still some room before the 2Y takes out the generation high of 5.06% hit in 2023, but that was cold comfort to auction participants, and the auction tailed by 0.2bps the When Issued of 4.785%.
It wasn't all bad: the bid to cover was 2.627, better than last month's 2.599 and above the recent average of 2.606%.
The internals were a touch weaker, with Indirects sliding from 66.01% to 57.79%, below the six-auction average of 58.6%. And with Directs rising to 29.0% from 23.1%, just above the recent average of 28.3%, Dealers were left with 13.2% of the auction, the highest Dealer allocation since March.
Overall this was an average auction, and while the internals were not too bad, the small tail suggested that the concession was not enough to inspire too much excitement.
Tyler Durden Tue, 09/22/2026 - 13:24