In what is the first confirmed strike against a foreign-owned oil asset, Libya’s National Oil Corporation said a warehouse in Tripoli that it owns jointly with Italian Eni was hit after an air strike.

Reuters quoted NOC’s chairman Mustafa Sanalla as saying, “We are witnessing the destruction of the corporation’s facilities before our eyes,” adding that the material losses from the strike were significant.

The air strike comes as Khalifa Haftar’s Libyan National Army continues its offense on Tripoli, currently held by the UN-recognized Government of National Accord.

Continued clashes in Libya and an escalation of hostilities could threaten the oil production of Wintershall Dea in the North African country, Mario Mehren, the chief executive of the European oil and gas group, recently told Russian agency TASS in an interview, echoing analyst comments that Libya could be the next sudden supply outage on the global market.

While oil traders have more or less gotten used to news about production outages in the North African country, these have been temporary, with the longest lasting about three months before restart. Now, with all eyes on the Middle East and Venezuela, and on U.S.-Chinese trade talks, analysts seem to have missed the growing risks for oil production from the continued fighting in Libya.

The security situation in Libya has materially worsened since this spring after eastern strongman General Khalifa Haftar ordered in early April his LNA to march on the capital Tripoli. The self-styled army has been clashing with troops of the UN-backed government in a renewed confrontation.

NOC started to warn as early as in April that hostilities could threaten production, and this time, the situation could be worse than at the start of the civil war in 2011. The threat is rising at a time when NOC is making progress towards recovering Libya’s oil production after a slump following the civil war. Without the outages, the country produces about 1 million bpd.

By Irina Slav for Oilprice.com

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