The Middle-East is hardly calming down and with the situation in Libya raging on, the chances they will be able to get their oil business back on track in the near future seems unlikely.
Even still, the announcement prompted Benchmark crude to slide 77 cents to $104.63 per barrel this morning on the New York Mercantile Exchange. In London; however, Brent crude climbed 11 cents to $115.53 per barrel on the ICE Futures exchange.
Even if Libya is able to get exports back on track their remains the issue of who will purchase the oil when International Sanctions clearly state that trade with the nation is prohibited. Asian nations, whose oil demand is rising alongside growing industrialization, urbanization and in the case of Japan, a decline in nuclear power, may consider involvement. Even still though, with things being as touch-and-go as they are, there remains the question of how long the rebels can hold onto the oil fields and whether it will be a worthwhile contract to engage in.
All the uncertainty surrounding the situation has led to enormous rises in gas prices which have been threatening to derail the economic recovery. If Saudi and Iran, heavy hitting oil producers, do become involved in the conflict, the U.S may have to consider pursuing domestic oil drilling more seriously. Prices at the pump are setting records with the national average reaching $3.584 per gallon on Monday, a number unparalleled for this time of year. In the last month alone, prices have risen 25.1 cents and 78.1 cents on the full year according to AAA, Wright Express and Oil Price Information Service.