Libyan chaos stirs global panic over oil supplies

Libyan port workers, frightened of being caught up in Moammar Gadhafi's violent crackdown on protesters, fail to show up for work, leaving empty tankers floating around the Mediterranean Sea waiting to load crude.

And the European oil companies extracting Libya's black gold are operating in crisis mode, trying to get stranded expatriate workers out and safe amid conflicting information on how much oil is still being pumped and just where it all is.

That was just this week. The situation is not expected to get better in the near future.
No one knows whether Gadhafi or the rebels trying to oust him will end up controlling Africa's biggest oil reserves. Fears abound that Libya could turn into a fractured nation with competing armed groups ruling over rich and remote desert fields lying hundreds of miles (kilometres) apart from each other.

The chaos in Libya as it descends into virtual civil war has sent international oil prices skyrocketing despite a pledge from Saudi Arabia, the world's largest oil exporter, to ramp up exports. And that volatility is likely to continue, because it could take weeks or even months for Libyan production and exports to return to normal levels, experts said.

That has sent already over-caffinated oil traders into a frenzy that won't calm down until there's more clarity about what is happening on the ground in Libya.

The International Energy Agency reported late Friday that Libya is probably still producing about 850,000 barrels of oil daily, down from its normal capacity of 1.6 million barrels but acknowledged the estimate is based on "incomplete, conflicting information."