Oil Hits 2.5-year High on Arab Revolts

Libyan Oil Tanker (Wiki Commons M. Elhaif)

As the Libyan revolt convulses into the bloodiest protest in the Arab world, oil reached its highest level in two-and-a-half years. Brent crude reached $108 per barrel for the first time since 2008.

Libya is one of the biggest oil producers in the world with one of the largest proven oil reserves on the African continent. They export approximately 400 million barrels of oil per year, or about 1.1 million per day.

The civil unrest in Libya follows the overthrow of Mubarak in Egypt which has left the future of the Suez Canal somewhat uncertain. Although all indications are that the transitional Egyptian authorities will respect diplomatic and economic treaties, commodities markets are still concerned.

Diplomatic staff and oil services companies from the United States and the European Union announced their evacuations from Libya further straining the flow of oil. Oil prices will likely continue to increase as long as the civil unrest persists in the Arab world.