If you are looking at the disruption of movement and production in countries such as Saudi Arabia and the UAE, you’re easily talking $5 gas,” says Peter Beutel, president of energy adviser Cameron Hanover.
Japanese bank Nomura outlines a scenario in which crude oil could reach an eye-popping $220 per barrel:
“If Libya and Algeria were to halt oil production together, prices could peak above $220 a barrel and OPEC spare capacity will be reduced to 2.1 million barrels a day, similar to levels seen during the Gulf war and when prices hit $147 in 2008,” the Tokyo-based bank said in a note today.
On Tuesday, Saudi Arabia’s oil minister said the Opec oil cartel would be able to boost production to replace oil normally produced by Libya. But oil insiders say it is one thing for Opec to replace Libya’s volume and quite another to replace the type of light, sweet crude Libya produces – quite different from what comes out of Saudi Arabia.
King Abdullah, the Saudi ruler, has returned home after a three-month medical absence and unveiled benefits for Saudis worth $37bn (£23bn) in an apparent attempt to insulate the world’s leading oil exporter from a wave of Arab uprisings.
State media announced an action plan to help lower- and middle-income people among the 18m Saudi nationals. It includes pay rises to offset inflation, unemployment benefits and affordable family housing.
Hundreds of people have backed a Facebook call for a Saudi “day of rage” on 11 March to demand an elected ruler, greater freedom for women and the release of political prisoners.
King Hamad freed about 250 political prisoners and has offered dialogue with protesters, mostly from Bahrain’s Shia majority, who demand more say in the Sunni-ruled island.