The biggest story in world oil markets is… Libya.
While Syria may have stolen the headlines in the oil market last week, oil traders and refiners are paying closer attention to Libya.
The north African country has seen oil output slashed from around 1.4m barrels a day to around 250,000, as ports and oilfields have been closed by striking workers and militias.
In the context of global crude production of around 90m b/d, that may not sound like a huge loss. But in the much smaller market for high quality crude oil in which Libya plays a key part, it is critical.
This chart from UBS (which we’ve marked up slightly) shows monthly outages from various countries around the world, and as you can see, in the last two months there’s been a big spike in how much oil has come offline.
Anyway, while Syria seems to be moving the price of oil psychologically (oil dropped hard in the opening of trading after strikes were delayed), this is where a lot of the real supply issues are coming from.