Oil industry worries Libya unrest could spread

Posted: February 22, 2011 in World News

JOSHUA FREED and JANE WARDELL
My Way News
February 22, 2011

The first major protests to hit an OPEC country put the oil industry on edge Monday, sending crude prices jumping and raising speculation about the use of emergency oil reserves that have only been touched twice in two decades.

In addition to Libya, the industry is closely watching protests in Algeria, Bahrain and Iran, the second-largest crude exporter in the OPEC behind Saudi Arabia.

“The concerns in the market go beyond Libya,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “It’s unlikely we’re going to see any meaningful disruption of oil from the Middle East or North Africa, but the spread of this unrest has raised anxieties.”

Libya is more important to the oil industry than Egypt or Tunisia, scenes of the previous upheaval in North Africa. Oil passes through Egypt, where protesters recently forced out longtime ruler Hosni Mubarak, but Egypt is not an oil exporter. Tunisia is a minor exporter.

Bahrain is not a big oil exporter either, but it has some political similarities to Saudi Arabia, which sits atop the world’s largest reserves of conventional crude.

Libya exports some 1.1 million barrels of crude a day from production of 1.6 million barrels – ranking it about 17th among world oil producers. And it has the largest proven oil reserves in Africa.

The United States, the world’s largest consumer of oil, does not import any petroleum from Libya. But disruptions elsewhere can raise the price of oil worldwide.

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