Unrest in Libya sends oil price up
Oil price reaches 2 and a half year high, as European companies evacuate expatriate staff from Libya
The price of oil has risen in response to unrest in Libya.
The cost of Brent Crude went up by 1.75 per cent in early Monday trading, to $104.25 per barrel, amidst fears that supplies from Libya, which exports 1.1m barrels a day, may be disrupted. This is its highest level since before the 2008 financial crisis.
Libya is only responsible for 2 per cent of all oil production worldwide. However, it is a major gas and oil producer for the European Market, with an estimated European market share of 10 per cent.
Supplies of oil in Libya have yet to be significantly disrupted by events in the Middle East although the Nafoora oilfield, which is operated by a subsidiary of the Libyan state-owned oil company has shut down after strikes by workers.
Oil production is essential to the Libyan economy, with oil output accounting for 25 per cent of the country's economic output and 95 per cent of its export receipts.
Italy is Libya's biggest oil and gas customer, buying about a third of oil and gas exports.
Shares in Italian oil firm ENI, which has been buying gas from Libya for decades, have fallen 4.4 per cent.
ENI is vulnerable to instability in the region, with 13 per cent of its revenues coming from Libya and 30 per cent from North Africa as a whole.
Other foreign oil companies have been affected too.
Shares in OMV, an Austrian firm, fell by around 4.3 per cent this morning.
As violence escalates in Libya, European oil companies are evacuating expatriate staff.
40 of BP's 140 employees in Libya are expatriates and BP plans to evacuate them.
BP's offshore exploratory work in the Libyan Mediterranean is not affected.
The UK Foreign Office has advised all those for whom it is not absolutely necessary to remain in the country to leave by commercial means if it is safe to do so.
The US has also advised its citizens against non-essential travel.
About 3,000 Turkish citizens have applied to be flown home.
The possibility of unrest in Iran is also worrying commodities markets, as Iran is the second biggest oil producer, after Saudi Arabia, in the Organisation of Petroleum Exporting Countries (Opec).
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