Al-Shalawi: “From the Well to the Treasury; A Technical Reading of Libya’s Oil Statement for June 2026”

Written by oil and economic expert “Abdulmonsef Al-Shalawi”, a technical and economic analysis of production, exports, refining, and revenues.

The statement published by the National Oil Corporation (NOC) regarding the results of June 2026 represents an important step in improving disclosure on the performance of Libya’s most critical economic sector. It consolidates in a single document data on production, the state’s and partners’ shares, export volumes, allocations to refining and power plants, as well as collected oil revenues transferred to the sovereign account.

The importance of such data lies in shifting the discussion on the oil sector from general impressions and estimates to a framework of readable, analyzable, and comparable figures. In Libya, oil is not an isolated production activity; it is the primary source of foreign currency, the main financier of public spending, and the most influential factor in financial stability, exchange rates, and the trade balance.

From this perspective, regular publication of such data strengthens the role of the NOC as the technical reference responsible for managing production and marketing operations, while also providing the state and the public with a more accurate informational base.

Production Approaching 1.4 Million Barrels per Day

Total crude oil production in June 2026 reached:

41,867,126 barrels.

With a 30-day month, this translates into an average daily production of approximately:

1,395,571 barrels per day.

This is a significant production level, confirming the sector’s ability to maintain output close to 1.4 million barrels per day despite challenges such as aging infrastructure, natural field decline, maintenance requirements, supply chain constraints, and operational and logistical conditions surrounding the oil industry.

In the oil sector, production stability is not automatic. Fields naturally experience declining reservoir pressure and flow rates over time, requiring continuous drilling programs, maintenance work, pipeline servicing, and upgrades to production systems and recovery efficiency.

Maintaining this level therefore reflects ongoing operational efforts across fields, companies, and ports, and underscores the importance of sustained funding for technical programs, without treating operational and developmental expenditures as optional or deferrable.

An uninvested barrel today may become lost production and lost revenue in the future.

State and Partners’ Shares: Understanding the Contractual Structure

The report states that Libya’s share amounted to:

29,950,320 barrels,

while partners’ share amounted to:

10,909,540 barrels.

Accordingly, the state accounts for approximately 71.5% of total production, while partners account for around 26.1%.

These figures highlight the direct value accruing to the state from production systems, and reflect the contractual nature of oil agreements, which allocate production and revenues according to financial, technical, and contractual obligations between the state and partner companies.

Mathematically, the sum of the state’s and partners’ shares falls short of total production by:

1,007,266 barrels (approximately 2.4%).

This difference does not necessarily indicate loss or unaccounted volumes; it may relate to timing adjustments, storage movements, differences between measured production and contractual entitlements, or quantities pending measurement reconciliation.

It would be beneficial in future disclosures to present this item separately as “technical and storage adjustments,” ensuring full reconciliation between total production and allocated shares.

How the State’s Share Was Distributed

The state’s share during June was allocated as follows:

Crude oil exports:

25,480,272 barrels

Allocated to domestic refining:

4,097,943 barrels

Transferred to Ubari and Mellitah power plants:

372,105 barrels

These figures align with the total state share, providing a clear breakdown of its utilization.

Exports accounted for approximately 85.1% of the state’s share, refining for 13.7%, and power generation for 1.2%.

On a daily basis:

• Exported crude averaged ~849,000 barrels/day
• Refining intake averaged ~136,600 barrels/day

This reflects the dual role of managing export revenues while meeting domestic energy and fuel needs.

Balancing exports and internal consumption has become one of the most complex challenges in energy-producing countries, especially where refining capacity is limited and fuel imports remain necessary.

Domestic Refining: Value Is Not in Volume Alone

Approximately 4.1 million barrels were directed to local refining.

However, refining analysis does not stop at input volumes. The key indicators are output volumes, utilization rates, conversion efficiency, product quality, and production cost compared to imports.

Each barrel processed domestically does not automatically generate equivalent economic value unless it is converted into market-compliant products efficiently.

Future disclosures could include refinery utilization rates, outputs of gasoline, diesel, jet fuel, LPG, and other products, as well as the contribution of local production to domestic consumption.

Improving refining efficiency remains a critical path for increasing value-added from crude oil, reducing imports, easing pressure on foreign currency reserves, and strengthening supply security.

Exportable Stock: Proper Interpretation of the Figure

The report indicated:

7,758,304 barrels available for export as of June 30, 2026.

The NOC clarified that this includes volumes from May production and accumulated stocks from previous periods.

Therefore, this figure should not be interpreted as additional June exports, but rather as an inventory balance available for future sale or shipment.

Distinguishing between monthly export flows and end-of-month stock levels is essential for understanding the oil balance. Exports reflect actual movement during a period, while inventory reflects a snapshot of storage levels at a given date.

Revenues: Distinguishing Production, Export, and Cash Collection

Oil revenues collected and transferred to the sovereign account at the Libyan Foreign Bank amounted to:

$3,260,938,421.20

Royalties and taxes from concession contracts amounted to:

2,721,675,652.688 Libyan dinars

These figures highlight the central financial role of the oil sector in state financing.

However, it is important to distinguish between:

• Actual production
• Actual exports
• Cash collection

These do not necessarily align within the same month due to time lags between production, shipment, and payment.

Therefore, dividing monthly revenue by monthly export volumes does not produce a reliable average price per barrel, as revenues may include payments for shipments from previous months and include gas, condensates, and other products.

From Sovereign Account to Central Bank of Libya

The report clarifies that fuel import credits are deducted from collected revenues before the remaining balance is transferred to the Central Bank of Libya.

Thus, the reported $3.26 billion does not necessarily represent the final net amount transferred to the Central Bank.

More transparent reporting could separately show:

• Total revenues
• Fuel import credits
• Net transfer to the Central Bank

This would provide a clearer picture of the financial cycle between oil revenues and domestic fuel supply obligations.

Brent Price vs. Libyan Crude Realization

The report lists the average Brent price for May 2026 at:

$107.554 per barrel

Brent is a benchmark, but it does not represent the actual realized price of Libyan crude.

Libyan crude varies in quality, density, sulfur content, shipping conditions, and market demand, meaning some grades may sell at a premium while others at a discount.

Publishing a weighted average realized price for Libyan exports would provide a more accurate measure of marketing performance and competitiveness.

Natural Gas: A Strategic Resource

Natural gas production reached:

73.324 billion cubic feet

Average daily production:

~2.44 billion cubic feet/day

Available gas for consumption:

71.661 billion cubic feet

Actual utilized gas:

53.379 billion cubic feet

Low-pressure acidic and hydrocarbon gases:

11.365 billion cubic feet

These figures highlight the importance of gas in electricity generation, industrial use, exports, and reservoir pressure maintenance through reinjection.

Gas remains a key driver for Libya’s future energy transition, especially through reducing flaring, capturing associated gas, improving infrastructure, and expanding export potential.

Disclosure as a Tool for Institutional Strength

Regular and detailed data publication strengthens the NOC’s technical role and reduces speculation.

Transparency in the oil sector is not merely informational—it is a governance tool that improves planning, revenue forecasting, foreign exchange management, and investment decisions.

The next step could be evolving monthly reports into a full integrated oil and financial balance sheet linking production, storage, exports, refining, revenues, and transfers.

Conclusion

The June 2026 report shows a sector maintaining strong production levels, managing large export flows, domestic refining, and generating essential state revenues under complex conditions.

It also reflects meaningful progress in disclosure practices and confirms that the NOC plays a role far beyond field management—it manages the backbone of Libya’s economy.

Sustaining these results depends on consistent funding, maintenance programs, refining efficiency improvements, gas utilization, and reducing losses and flaring.

Oil does not translate into economic stability through production alone, but through efficient management, transparent data, and long-term national planning.

Therefore, continued technical performance and improved transparency remain essential pillars for protecting national wealth and strengthening the state’s ability to plan for the future.