The aftershocks from the unrest in Libya are also being felt across global financial markets.
Libya is the world’s 12th largest exporter of crude and the price per barrel has shot to a two-and-a-half year high amid investor fear that production could be disrupted.
It follows a speech by one of Colonel Gaddafi’s sons, Saif, who warned that all foreign oil companies might have to leave the country.
Rising oil prices can accelerate inflation and eat into companies’ profits, further unsettling an already rocky global economy.
The US lifted sanctions on Libya when Gaddafi compensated the families of victims of the Lockerbie bombing.
With free trade now a possibility, foreign energy companies lined up to do business with a man once considered as a pariah on the international stage.
The OPEC member is Africa’s fourth largest oil producer after Nigeria, Algeria and Angola. It produces up to 1.8 million barrels per day and holds estimated reserves of 42 billion barrels
Eighty percent of its crude exports are sold to European countries such as France, Germany and particularly Italy.
Libya has deep economic ties with Italy, its former colonial master. The two nations signed a friendship treaty in 2008 and Italy is now the biggest foreign investor in the North Africa country.
Libyan investors have used oil wealth to buy large stakes in a number of Italian companies including oil giant ENI, carmaker Fiat and even a 7.5 percent share of Juventus football club. Tripoli’s investments in Italy are worth some 3.6 billion euros.
While Libya has some of the highest living standards in Africa, some estimates indicate one third of its people live below the poverty line.
The question now is what happens if the violence escalates in Libya? It would come just as many Western economies are emerging from the global economic downturn.