Oil Crisis in Libya :: OPEC, Middle East

Because of the crisis that is going on in Libya, Libya’s oil production and exportation has been greatly affected. This country is a member of OPEC, Organization of the Petroleum Exporting Countries. Libya is the world’s seventeen largest oil producer, the thirds largest oil producer in Africa, and the continent’s largest crude oil reserves. (Hauser, 2011) Since Libya has such an important part in the oil industry, the crisis has affected other countries and their trade, such as the price of oil and gas, as well as monetary value. Libya only contributes two percent of the world’s oil supply. (Andrews, 2011) It might not seem like a big deal because of such a small percentage, but it is very hard for the world to absorb the two percent loss of oil every day. Libya was producing 1.6 million barrels of oil every day before the crisis erupted. (Dagher, 2011) As of now, unfortunately, it is only producing between four hundred and six hundred thousand barrels of oil. (Dagher, 2011) But it doesn’t even matter how much Libya produces, since it is currently not exporting oil and gas to outside countries, such as Europe and the United States. Most of the foreign workers have fled the country, which makes up for the industry in Libya. Eighty five percent of Libya’s exports are sold to European countries, especially Italy. (Dagher, 2011) Libya and Italy has close economic ties with one another, having a friendship treaty with one another since 2008. (Langundo, 2011) Italy is currently the biggest foreign investor in North Africa, who received thirty two percent of Libya’s oil exports. (Langundo, 2011) Italy is greatly affected by Libya’s turmoil. Italy is currently trying to re-establish its access to Libya’s oil and gas. As of now, the shortage of oil does not have a great effect in Europe since other countries, such as Saudi Arabia, have been increasing their oil production to make up the loss from Libya. Libya contributes about five percent of their oil production to the United States. (Dagher, 2011) Though out the United States, oil prices have been increasing between three and five percent because of the increase cost of barrels. (Andrews, 2011) It is hard for those who live in the United States to adapt to the higher prices. Many already have burdens from the recent financial crisis, but the increase in oil prices will only add to the people’s burden,