Oil consuming nations have emergency reserves they can use to stabilise markets in case the violence in Libya and the wider Middle East escalates and crimps production, officials said today.
But international executives and analysts meeting in London were nervously watching developments in the oil-rich region, worried about the sharp shock
political unrest is giving to crude oil prices.
Oil prices jumped yesterday because of the ongoing turmoil in Libya, where Moammar Gadhafi's son, Seif al-Islam Gadhafi, warned protesters on Sunday that they risked igniting a civil war in which Libya's oil wealth "will be burned." By yesterday evening, benchmark crude for March delivery was up US$3.10 to US$89.30.
Libya alone exports at least 1 million barrels of crude a day. Even more worrying for markets is potential contagion, or the spreading of the political violence to other countries in the Organisation of Petroleum Exporting Countries - key exporters Saudi Arabia and Kuwait are considered potential flashpoints.
David Fyfe, head of the oil industry and markets division at the International Energy Agency, stressed that the IEA member countries reserves of 1.6 billion barrels of oil - equivalent to some 4 million barrels per day for the next 12 months - that could be brought onto the market if necessary.
The IEA's 28 members are mainly oil consuming industrial nations such as the United States, Japan, Britain and Germany. It has used government stocks to steady the oil market only twice before. AP
