ENI Oil platform Bouri DP4
The political unrest in Libya could threaten energy exports to Europe if separatists in the oil-rich east of the country target infrastructure and look for a bigger chunk of revenues, analysts said on Monday. Crude oil prices have already jumped 5% Monday as violent protests spread in Libya. This is raising concern among experts that oil supplies from that OPEC nation could be disrupted.
By early afternoon in Europe, benchmark light, sweet crude for March delivery was up $3.92 a barrel to $90.12 in electronic trading on the New York Mercantile Exchange. The April contract was up more than $4 to $94.05.
Libya is Africa’s fourth-biggest oil producer and a key supplier for Europe, producing 1.6 million barrels a day of crude–the equivalent of about 2% of global oil demand. Italy, home to Libya’s biggest foreign oil operator Eni (ENI.MI), gets one fifth of its energy consumption from the North African country.
Operators in Libya include Eni, BP (BP.L), Royal Dutch Shell (RDSa.L), Repsol (REP.MC), OMV (OMVV.VI) and Statoil (STL.OL). Many are repatriating staff. BP PLC (BP) said Monday it was suspending preparations to drill in the Libyan desert as its contractors pull out due to unrest in the country, but is continuing its offshore operations. Austria’s OMV AG (OMV.VI) and Germany’s RWE AG’s (RWE.XE) exploration unit RWE Dea said they had already withdrawn some staff from the country.
Libya’s oil wealth makes the uprising fundamentally different from the popular revolts that toppled leaders in Egypt and Tunisia, which are not top oil exporters.
“I have been following oil issues for 30 years and had not seen anything like what is happening now since the 1970s,” said Davide Tabarelli, head of energy think-tank Nomisma Energie. “In the 1970s, it was all concentrated in a few countries, we had the war with Israel. Now it’s worse.”
