Importance Of Libya For World Oil Production
Libya in unrest/civil war is having a mayor impact on the oil markets. Crude oil (brent) has yesterday reached post crisis high of 108.7 USD/bbl. The outcome of the Libya crisis is absolutely uncertain and together with other regional instability will be a strong factor for rising oil prices.
High oil price does not bode well with economic growth, so this could be large negative factor for economic growth and inflation.
According to OPEC January data Libya produces approximately 1.6 million barrels of crude per day. This is 3.9% of total OPEC production and 1.8% of world total demand.
Additionally Libya has 200,000 bbl/day of spare capacity. If we subtract Libya total production capacity from OPEC spare capacity OPEC still has 3.7 million bbl/day of spare capacity which ensures that there will not be physical shortages of crude oil if Libya stops producing.
Crucial things to watch are Iran and Saudi Arabia. Any unrest there could send crude oil could price to all time high.