Protests In Oil Rich Libya See Oil Prices Reach Two And A Half Year High
Continued unrest in the Middle East and in particular oil rich Libya has seen oil prices rise to their highest levels for over two years.
Libya is a key oil producing country and exports 1.1 million barrels a day and is the second biggest oil producing member of OPEC (Organisation of Oil Exporting Countries). As protests continue in Libya oil has reached a new two and a half year high.
Brent crude for April delivery rose to $104.60 a barrel while US crude for March delivery was up $2 to %88.42 a barrel. It means that we can expect these oil price rises will hit petrol and diesel prices which are already at record highs in some areas of the UK.
Some European energy companies are taking staff out of the country while the Italian oil company, ENI, said that its operations were not affected by the protests. However, shares in the oil company have fallen 4% and there must be concerns in Italy as the country is Libya’s biggest customer, buying about a third of Libya’s oil and gas.
Other oil companies including Austria’s OMV and Norway’s Statoil are removing expat staff while Shell has evacuated family members of its non Libyan employees.
Protests have reached the Libyan capital, Tripoli, as Colonel Gaddafi’s son, Saif, admitted that Libya’s second city Benghazi was now controlled by protesters. He warned that the protests could lead to civil war and said that his father would fight to remain in power.
Meanwhile there have been threats by the head of the Al-Suwayya tribe in eastern Libya that they will cut off oil exports if the authorities don’t end the “oppression of protesters”.
As tensions escalate in Libya, protests are continuing in Bahrain and concerns remain that the unrest could spread throughout the Middle East – and even reach Saudi Arabia. Experts add that prices could increase by at least another $10 if the protests continue.