Libya has struggled to regain lost oil output since autocrat Muammar Gaddafi was ousted in 2011.
Oil prices dropped by more than $1 per barrel and Brent crude hit a fresh four-year low at below $83
Concerns surrounding global economic growth have raised questions about future oil demand.
Oil futures under pressure as supplies rise amid dismal global economic data and weak demand.
Shahara oilfield accounted for around 30% of national production before it shut down on September 16.
Brent crude maintains downtrend as IEA and Opec predict lower demand.
Brent October contract finishes slightly lower on demand concerns.
Upbeat US data, rising output from Libya and demand for crude oil revisions weighed on prices.
Weak supply-demand fundamentals holding Brent in contango structure.
Brent trades lower on rumours US air strikes will lower risk of oil supply disruptions from Iraq.
Brent's $105-$110 a barrel trading range unlikely to change much next week.
Opec predictions for 2015 show US boosting its own oil production by 7%.
Opec and IEA to release their first estimates for 2015 next week.
US state of Texas pumped more than three million barrels per day in April, almost equivalent to Iraq's monthly production.
Brent and WTI contracts for August down 1.3%.
Brent hit by news that Iraq plans big increase in oil exports in July.
Oil to jump if conflict spreads to southern Iraq, where most production sites are based.
OPEC production will decline, with US reserves of oil extracted from oil sands and shale rock spearheading the competition.
Iraq crisis boosts crude oil's safe-haven status over gold.
International Energy Agency says biggest source of new Opec oil is at risk after Sunni militants take Mosul.
Iraq switch oil exports to Basra after Mosul attack.
Opec member says it expects production cap to remain at 30 million barrels per day in bid to maintain price.