Libyan oil production will take years, not months, to return to full capacity once a political solution to the conflict is found, according to Barclays Capital.
“The reincorporation of Libyan oil into the world market increasingly seems a distant possibility” according to the study, which warns of a lasting political vacuum after the potential fall of the Gaddafi regime.
Reuters and Upstream are reporting what looks like good news for those relying on Libyan oil supplies. According to both sources, Jammal bin Nour a judge and member of the coalition that says it is in charge in Benghazi, has said:
The oil deals (with foreign companies) that are legal and to the benefit of the Libyan people we will keep.
Colonel Gaddafi’s rather strange television appearance last night failed to quell the Libyan insurrection, and this morning has seen a mounting number of oil companies depart the country and the oil price continue to surge.
The news for Opec in the short term is bad, with Libya currently accounting for 1.6m barrels a day of oil production. In the long term, it could be even worse, however, especially if trouble spreads to Kuwait, with 2.3m b/d, Iran, with 3.7m, or even the big one – Saudi Arabia, with 8.3m.