Economic expert Sulaiman Al-Shuhumi spoke to Sputnik news agency. Al-Shuhumi is the founder of the Libyan Stock Market. He stated that recent developments in Venezuela have not caused clear reactions in global markets. The impact of these developments remains unclear at present.
Al-Shuhumi predicted a potential impact: an increase in oil supply. He noted the United States faces challenges with shale oil production. Shale oil is not economically viable in some stages. Any such impact would be long-term, not short-term. It would likely manifest more significantly in the future, not currently.
He added that Libyan oil has a very close geographical location to European markets. It is also high-quality oil. Venezuelan oil is heavy. It requires special and complex programs and technologies for refining and utilization. This poses significant technical challenges for Venezuela. Libyan oil is of much higher quality compared to Venezuelan oil.
Al-Shuhumi ruled out a direct impact of these developments on Libyan oil in global markets. The only potential effect would be a general drop in global oil prices. This would then affect the Libyan economy.
He explained that falling oil prices would directly affect the state budget. The Libyan economy relies almost entirely on oil revenues. Oil and gas revenues constitute about 98% of total state revenues.
Al-Shuhumi also discussed increasing oil production. He mentioned estimates suggesting Libya could raise oil production. This could potentially exceed two million barrels per day. He considers this proposal highly unrealistic under current conditions. Increasing oil production requires massive investments. It also needs clear and announced programs. Furthermore, significant administrative, technical, and logistical preparations are essential. These are needed to boost production and export capacity. This includes preparing ports for storage and expanding new exploration operations.
He pointed out that all these efforts require a stable environment. They also need considerable effort and high transparency in the oil sector. He emphasized that developing the oil sector demands a long-term, sustainable project. This project should span five to ten years. It must be free from the influences and disruptions of current economic conditions. These conditions largely rely on borrowing. He stressed the necessity of stable programs. These programs would form the basis for a true strategy to develop oil production.
Regarding reducing Libya’s reliance on the oil sector, Al-Shuhumi expressed doubt. He does not believe this will happen in the near future. Developing alternative revenue sources requires long-term plans. These plans could extend for ten or twenty years. They must be based on clear, announced, and adhered-to policies. He clarified the need for clear visions for economic development over the coming years. He considers talk of immediate economic diversification within one or two years unrealistic. It is not feasible under current conditions.
He affirmed that diversifying the Libyan economy requires a structured economic project. This project must be properly organized and framed. Only then can broader diversification be achieved in the future. The oil sector itself could be a key pillar of this diversification. This is due to its reliance on multiple and diverse products. It also has the ability to stimulate other industries. This makes it a potential gateway for comprehensive economic development.