Rebel forces have declared victory over what remains of Muammar Gaddafi’s supporters, giving new hope that the six-month conflict for control over Libya is nearing an end. International oil prices spiked in February when damage from the conflict halted production of Libyan crude, keeping it from world markets. If and when rebel forces consolidate their power, they will be charged with resuming production which, before the fighting, amounted to 1.5 million barrels per day. For now, domestic demand is expected to claim any short term production increase.
What’s the Big Idea?
High oil prices are generally associated with economic slowdown since petroleum is necessary to produce innumerable amounts of goods, not to mention transporting those goods across the globe. As the main purchaser of Libyan crude, Europe’s economy has been hit especially hard by the war with per barrel prices rising as high as $126.65. “The rebel-controlled Arabian Gulf Oil Co. could restart up to 180,000 barrels a day within a two-week period after security is guaranteed for the facilities.” Oil prices are currently down as demand has slid in response to the global economic slowdown.