TRIPOLI: Libya hopes to resume oil production at one of its largest oilfields, El Sharara, within three days after protesters agreed to suspend their two-month stoppage, officials said on Thursday.
Tribesmen calling for greater local power have held the 350,000 barrels per day field blocked since the end of October, one of many disruptions that have crippled Libya's vital oil sector.
Oil prices fell below $110 a barrel on the news.
The defence ministry said the protesters had agreed to suspend their strike after the government agreed to listen to their demands, a ministry spokesman said.
"They agreed to lift the blockage," the spokesman said.
The field supplies crude from the Zawiya export terminal, unaffected by any disruption, and feeds the 120,000 bpd Zawiya refinery.
Libya's State National Oil Corp (NOC) hoped to resume output in three days, NOC spokesman Mohamed al-Harari said on Thursday.
"Engineers are preparing the field to restart production," he said.
The protesters had demanded the setting up of a local council and granting national identity cards for tribesmen form the minority of Tuareg.
"Information out of Libya needs to be taken with some caution until confirmed by facts, but this could bring a temporary increase in Libya production to about 600,000 barrels a day," said oil analyst Olivier Jakob of Petromatrix in Zug.
"Exports from Sharara would be easier to materialise if the protests are indeed lifted as the field exports from the port of Zawiya, and that port is open."
Militias and tribesmen have seized ports and oilfields across Libya to press for political or financial demands, cutting output to around 220,000 bpd from 1.4 million bpd in July. Oil is the main source for the budget and for the funding of food imports.
Western powers fear the North African country will slide into instability as the government struggles to rein in militias that helped topple Muammar Gaddafi in 2011, but kept their arms.
Prime Minister Ali Zeidan has said the government will act against the oil strikes but its nascent army, still in training, it too weak to tackle heavily armed protesters, analysts say.