Libya Updates: Becoming More Like A Civil War8 March, 2011, 13:48. Posted by Zarathustra
Tags: Libya, Middle East, Saudi Arabia
I am not following the development very closely, but situation in Libya is becoming more like a prolonged civil war, and there are worries that the unrest will continue to spread to other oil-producing countries around the Middle East, including Saudi Arabia. Opec members are now rushing to increase oil output to make up the shortfall in output from Libya, and the United States is considering military intervention.
The big thing at stake is oil. Although Libya’s oil production only accounted for about 2% of the world total output according to BP, the whole of Middle East output accounted for 30.3% of world output. Should unrest in the region be spread to more “important” country like Saudi Arabia (which produced 12% of the world total output), there is a big risk of serious disruption of oil production.
There is, of course, nothing particularly serious happening as far as oil production is concerned. After all, Libya’s share of world production is small (although some argued that Libyan’s oil is light and sweet, not quite substitutable by Saudi’s oil), and other countries are ramping up the production. Saudi Arabia has also pledged to offer $36 billion to its people in hope to stop the uprising, and has ban protests all together.