Thursday, February 24, 2011

He May Get His Wish

Earlier this week, Libyan dictator Mummar Qaddafi vowed to fight anti-regime protesters to "the last drop of blood."

Did Qaddafi get his wish? Within the last hour, rumors have been circulating on the oil market that the Libyan leader has been shot--perhaps fatally. Western news outlets have been unable to confirm that report.

Meanwhile, U.S. crude oil is trading just over $97.00 a barrel. However, Brent crude reached $119 a barrel earlier today, before retreating to around $112 in afternoon trading. Look for an even higher spike if Qaddafi's death is confirmed. Mummar is certainly deserving of a bullet between the eyes, but his demise (if accurate) raises the questions about who/what comes next? Much of Libya's oil production is already shut down, and western oil companies won't send their workers back until the political situation stabilizes.

Saudi Arabia has promised to make up for any production shortfalls resulting from the chaos in Libya, but there are no long-term guarantees for the Riyadh regime, either.

1 comment:

Nancy Reyes said...

well, the oil shales in Canada and North Dakota may help if the environmentalists are kept quiet, as may Alaska, if Murkowski and her oil company friends get their way. Heck, even the coal mines in PA may reopen, as they did under Carter.

What this will affect is not so much the US as the third world, where oil prices will cause an increase in food prices (on top of the wheat harvest problems in Pakistan and China).

But will the real long term effect of the Middle East problems make China more eager to expand into the oil fields of Central Asia and the Spratlys? That's the real question.

And of course, lots of Middle Eastern oil workers are from Asia: local papers report 26000 Filipinos and 16000 Chinese are being evacuated from Libya alone....if Saudi etc. falls, that means a million Pinoys, Indians, Pakistanis and Indoys no longer sending money home to their families....