Libya has the largest reserves of oil in Africa — and the ninth largest reserves in the world — however in the wake of weeks of political upheaval and dissent the country’s daily production of 1.6 million barrels has declined by more than half. As a result, oil prices are now skyrocketing around the world, and today the cost of a barrel of oil topped $106 – the highest the cost of oil has risen in the past two and a half years. If there’s ever been a concrete event signaling the urgent need to shift towards more sustainable energy sources, this is it.
Photo © Antony
The conflict in Libya has already taken its toll around the world – pump prices are increasing across the states, and Spain has announced lowered speed limits and public transportation incentives to help cope with the rising price of oil. The US and other countries are currently considering tapping into strategic oil reserves following last week’s landmark 7% price rise, and some analysts believe that if oil rises above $150 for more than a few months it could trigger another recession. The United States’ heavy reliance on foreign oil also constitutes a threat to national security that has the military currently investing in renewable initiatives.
As the fires of Libya’s political unrest ignite soaring oil prices across the globe, there’s never been a better time to call for sustainable energy sources that decrease our investment in foreign oil. From biofuels and electric vehicles to large-scale solar and wind installations, we currently have the technologies necessary to transition towards a more sustainable, fossil-fuel free world.
Via CNN
Lead photo © Lars Christopher Nøttaasen
Libya makes up less than 2% of OPEC’s daily production. Even with the decline in production coming out of Libya, OPEC is still hitting their production numbers, which means there has been no change in the oil supply on the market. What is happening is that market middlemen are bidding up the price of oil futures with the expectation that there will be a supply shortage somewhere in the future. There is no fundamental reason why the price of oil should be high right now other than some people’s greed.
If you look at the price of wheat futures, you’ll see that as soon as the unrest in the Middle East started, the price of food went way down as people sold their wheat futures and moved money into the oil market. The price of oil has nothing to do with what’s going on in Libya and has everything to do with what’s going on on Wall Street.
If you want to report on the price of oil, report the real story. Wall Street is using the Libyan unrest as cover to make millions on the backs of the rest of the economy.