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Chairman Of Libya National Oil Corporation Hopes Oil Does Not Become "Weapon", Sees $130 Price If Libyan Unrest Persists

Tyler Durden's picture





 

With US, and now Canadian and Korean warships all converging on Libya, the developed world is certainly sending Tripoli a very loud and clear message. And with Libyan defense forces obviously a joke in comparison to the offensive being slowly mounted against it, one wonders what if any defense tactic the Northern Africa country has. The answer: oil. From Reuters: "Libya hopes tensions with Western countries over a popular revolt in the country do not reach the stage where the Tripoli government considers oil as a political weapon, a top oil official said on Wednesday. Shokri Ghanem, chairman of Libya's National Oil Corporation,
also told Reuters in an interview that Libya's troubles had
created the country's worst energy crisis in decades and Libyan
supply disruptions to world markets could push oil above $130 a
barrel in the next month if troubles persist.
" Yet as Saudi Arabia has used every chance to make it all too public, the kingdom supposedly has more than enough capacity to pick up the slack, should war break out and Libya go ahead and set fire to its wells. So it is surprising that the Arab League roundly rejected "foreign intervention" in Libya, putting US offensive forces in a tight bind, should it decided to proceed with an attack.

More on the realization that Libya is openly considering its oil reserves as its last true natural defensive trump card:

 Oil markets will be watching closely to see if the departure of oil workers fearful of violence in Libya will further cut output in the world's 12th largest exporter.

Ghanem said crude oil output had dropped to 700,000-750,000 barrels per day after the flight of most of the foreign workers who make up about 10 percent of the Libyan energy industry's labour forces, including some in key positions. Before the crisis Libya pumped 1.6 million bpd.

Asked if Libya would resort to using oil as leverage, or a political weapon if the United States and other Western countries stepped up pressure on Libya over its handling of the revolt, Ghanem said:

"I hope we are not reaching any stage where we are talking about using this (oil) as a political force," he said.

"We hope that all things will be solved before we go into any complications of any matters."

As for how arabs view a potential incursion into Libya...

he Libya crisis is an internal Arab affair and there should be no foreign intervention, the Iraqi foreign minister told the opening session of an Arab League meeting in Cairo Wednesday.

Iraqi Foreign Minister Hoshiyar Zebari, delivering the opening remarks at the Arab foreign ministers meeting in Cairo, said the Libyan leadership must make brave decisions to stop violence and respect the "legitimate rights" of the people.

He called on the ministers to stand in silence in memory of Arabs killed in a wave of pro-reform protests that have swept the leaders of Egypt and Tunisia from power and are challenging the rule of others in Bahrain, Libya and Yemen.

He said the Arabs confirmed their "desire for no foreign intervention" in Libya.

Wednesday's meeting is expected to reiterate the body's condemnation of Gaddafi, but the draft resolution will also stress "the unity and integrity of Libyan soil."

And after all this, one would think there would be some flight to safety to the dollar.... and one would be wrong. The DXY has traded to the lowest levels in the overnight session, as the EUR jumps, and the USDCHF continues probing all time lows, as the dollar continues to wallow in its irrelevance. Additionally, silver which just hit $34.80, is also not suffering from any flight to safety speculation.

 


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Wed, 03/02/2011 - 08:44 | Link to Comment williambanzai7
williambanzai7's picture

Wed, 03/02/2011 - 08:44 | Link to Comment the not so migh...
the not so mighty maximiza's picture

oh god gross,,,,,, yuck

Wed, 03/02/2011 - 08:46 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

You should be fucken banned

Wed, 03/02/2011 - 08:47 | Link to Comment Confused
Confused's picture

You might have ruined my ability to eat today. ;-P 

Wed, 03/02/2011 - 09:03 | Link to Comment johnQpublic
johnQpublic's picture

jesus dude, a person cant "unsee" things

that nightmarish vision is gonna be stuck with viewers permanently

Wed, 03/02/2011 - 09:19 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

I'd hit it.

Just to say I did.

Wed, 03/02/2011 - 08:48 | Link to Comment Moe Howard
Moe Howard's picture

Yikes!

Wed, 03/02/2011 - 08:48 | Link to Comment williambanzai7
williambanzai7's picture

Wed, 03/02/2011 - 09:02 | Link to Comment StychoKiller
StychoKiller's picture

Augghh!!  Mr. PotatoHead on acid!!

Wed, 03/02/2011 - 08:48 | Link to Comment sulfur
sulfur's picture

challenger report is out - the rumor has it chairsatan now started printing work contracts and giving them away with food stamps

Wed, 03/02/2011 - 08:51 | Link to Comment TradingJoe
TradingJoe's picture

Oil will go up, no matter what happens in Libya or else where! As to the Bucky, well it might see a short lived comeback, courtesy of the EuroZone troubles! Silver and Gold will push higher because there is literally no other "flight to safety" at this time or another! In this respect, markets will move lower, and lower, and lower!

Wed, 03/02/2011 - 08:52 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Oil does not become a weapon?

It is the cause, effect and everythign between what is happening in that region for decades. Of course it can and will be used. Q-Wait and Eye-raq showed how.

Plus, they need to get the price to that $200 range to really make th esheep line up to get sheared. Right now, too much bleating and not enough beating.

ORI

http://aadivaahan.wordpress.com/2011/03/01/on-outsourcing-and-its-ills/

Wed, 03/02/2011 - 08:56 | Link to Comment cossack55
cossack55's picture

"too much bleating and not enough beating." Good one, ORI. Can I borrow it sometime?

Wed, 03/02/2011 - 09:09 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Indeed Cossack. Sad as it is! 

ORI

Wed, 03/02/2011 - 09:03 | Link to Comment Confused
Confused's picture

Agreed, that is a great saying.

 

And sadly what you are saying seems to be the rule. 

Wed, 03/02/2011 - 08:53 | Link to Comment cossack55
cossack55's picture

Are those North or South Korean ships? Gaddafi may be a goofball, but anyone who can stick the Evil Empire in the eye is OK in my book.

Wed, 03/02/2011 - 08:59 | Link to Comment themosmitsos
themosmitsos's picture

It's a mistake to think they dont have any defensive options other than destroying Oil. facilities. This is a leader that can and WILL continue recruting African Mercs and make this situation as messy as possible. I do not believe they destroy the oil, but I understand the reasoning.

Wed, 03/02/2011 - 09:03 | Link to Comment williambanzai7
williambanzai7's picture

Justifiable Force (American Style)

Wed, 03/02/2011 - 09:04 | Link to Comment StychoKiller
StychoKiller's picture

I believe that Al Capone had the same sort of trouble with Bugs Moran, for pretty much the same reasons!

Wed, 03/02/2011 - 09:05 | Link to Comment johnQpublic
johnQpublic's picture

....to make sure they meet our standards for basic abuse....

Wed, 03/02/2011 - 09:09 | Link to Comment Confused
Confused's picture

well played. 

Wed, 03/02/2011 - 09:10 | Link to Comment Confused
Confused's picture

Someone is in a good mood today. Keep up the good work sir. 

Wed, 03/02/2011 - 09:28 | Link to Comment williambanzai7
williambanzai7's picture

The circus is in town,lets have a good time ;-)

Wed, 03/02/2011 - 09:19 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Teh Department of Defense of the Corporation of the UNITED STATES OF AMERICA.

Anywhere it's all caps, it's the company. And look at these guys.... ugh!

Between this and that hillary thing.... ugh ugh!

ORI

Wed, 03/02/2011 - 09:13 | Link to Comment SashaBelov
SashaBelov's picture

Sorry for off-topic. Buffett is joking againg about overpriced, useless, shiny 67 feet gold cube:

 

http://www.cnbc.com/id/15840232?video=3000008248&play=1

 

And of course making CNBC squad smilling and climaxing. It's just interesting, that when he's making 2 options: to have gold cube or to have all farmland, 7 XOMs and trillion cash, he doesn't make third option: to have farmland, 7 XOMs and 30feet gold cube instead of trillion depreciating dollars. He just couldn't be so stupid to not find out this less ironical third option. So, that means he is counsciously picking up this funny case to diminish a position of gold as hard money.

Wed, 03/02/2011 - 09:23 | Link to Comment slackrabbit
slackrabbit's picture

THERE IS NO GOD!!!

Wed, 03/02/2011 - 09:29 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

There was but Tyler or whoever banned him.

Wed, 03/02/2011 - 09:25 | Link to Comment falak pema
falak pema's picture

The libyan pipeline is coated with TNT. Q master knows this. The West should take heed. If they gave Q a Nobel peace prize immediately on special basis as a follow up to the Oscar ceremonies, anointing him alike his ex-mentor, now would-be torturer, Mustapha Mond, he would reconsider igniting the TNT in case of...obtaining an exceptional prize. By proxy, from the iconistic plutocrat whose children still make some cents from the sale of TNT, ( Mr Nobel). This has a nice nostalgic, family touch which should go down well with great Q, before he agrees to open wide the tap again. And cease his threats to blow up the golden eruption of black gold. A prize, to soothe his pride in erectile rage, is a small price to keep the lid on Saudi shangri-la. Maybe the penny will drop as his pet Bankstas tell the tale to sweet Lenina Crown whose  beautiful head appears so enticingly (??) in your presentation above. Will the USA back down, as plead the Bankstas and the oil lobby, scared shitless by all these 'democratic' tectonic under-movements in their oil garden-of-allah, is still to be seen...

Wed, 03/02/2011 - 09:39 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

No surprise to the US. The shape charges were planted by special forces to force inflation.

Wed, 03/02/2011 - 09:52 | Link to Comment johnnymustardseed
johnnymustardseed's picture

I don't get why if they charge $130 for a barrel of oil, we don't charge $150 for a barrel of wheat....They don't like it, let them grow their own fucking wheat

Wed, 03/02/2011 - 10:04 | Link to Comment Judge Judy Scheinlok
Judge Judy Scheinlok's picture

It took half a barrel of oil to grow a barrel of wheat.

Wed, 03/02/2011 - 10:26 | Link to Comment rwe2late
rwe2late's picture

 The US, unlike other countries, can print petrodollars as fast as OPEC can raise the price of oil.

 The ME military protectorates of the US realize their subordinate and dependent position. They know what would happen if they overstep the bounds of the petrodollar extortion racket. Saddam quickly found out when he wanted to go off the petrodollar. Iran will remain under the gun unless they "wise up".

Wed, 03/02/2011 - 11:19 | Link to Comment falak pema
falak pema's picture

soon be running out of guns as bullets cost a ton and getting GI Joe to Oman is not easy when he's been shell shocked in A-gan. Musical chairs time. The market removes one chair every second from the US defense budget. Teeth gnashing at Pentagon head q. But not much else. The times are now a-changing...

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