Why Libya’s oil matters
The total world production of oil is 88 million barrels daily. The world uses 88 million barrels of oil daily. The world uses about 31 billion barrels of oil yearly. Every “second” the world burns through 1,000 barrels of oil. Want proof: http://www.kregerdesignbuild.com/ peakoilclock
Libya oil production is just about 2 percent of world oil supply or 1.6 million barrels a day. Most of that oil goes to the European markets to be turned into gas, diesel and jet fuel. Libya’s oil is “sweet light crude,” the easiest to turn into usable products. Saudi Arabia has said it will make up for any lost production from Libya. Saudi oil is a “medium sour weight crude,” much harder and far more expensive to turn into usable products.
The U.S. imports 88,000 barrels of oil daily from Libya. The U.S. will have to replace that lost production by buying more expensive oil from Nigeria or Algeria. Bringing the average cost of gas to $4-plus a gallon.
West Texas Intermediate Crude produces over 4 million barrels of oil a day mostly used for fuel production. But this is no where near enough to meet the demand for gas.
When Mohamed Boziz set himself ablaze in February in Tunisia no one knew his actions would change the face of leadership in the Arab world. As the leadership changes so does who controls the oil.
Libya matters because we are now seeing a battle for who controls the oil. What happens in Libya doesn’t stay in Libya. It impacts the entire world.
If you want a better overall view of what is going on with oil, visit http://www.theoildrum.com.
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