Libya unrest send oil prices soaring

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Libya unrest send oil prices soaring

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Oil prices have shot up as clashes in Libya threatened to disrupt supplies of crude.

With scores killed in anti-government demonstrations, the leader of the Al-Zuwayya tribe in eastern Libya said oil exports to the West would be cut off unless authorities stopped violence against protesters.

It has also been reported that striking workers have halted production at Libya’s Nafoora oilfield which is run by the Arabian Gulf Oil Company.

At one stage Brent crude oil futures rose to a two and a half year high above $105 a barrel. US light crude rallied by more than three percent to over $89 a barrel.

European oil and gas companies have evacuated workers and suspended drilling preparations in Libya as the violence spreads.

Firms including Norway’s Statoil, Austria’s OMV and Anglo-Dutch Shell said they were withdrawing expatriate employees.

Wintershall, the oil and gas exploration arm of BASF, prepared to shut down its output in Libya and fly out international staff.

UK oil major BP, which does not produce oil or gas in Libya but has been readying an onshore rig to start drilling in the west of the country, has suspended operations because of the escalating violence.

Libya is the worlds’ eighth largest exporter of oil. North Africa and the Middle East produce just over a third the world’s crude and hold around an estimated 60 percent of proven reserves.