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Libya Declares Force Majeure On Oil Exports Of 1.5 Million Barrels A Day

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posted on Feb, 22 2011 @ 02:14 PM
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Libya Declares Force Majeure On Oil Exports Of 1.5 Million Barrels A Day

Reuters reports that Libya has just declared force majeure on its oil exports. As a reminder, Libya exports (under non-force majerue conditions) about 1.5 million barrels per day. That's a lot of barrels, especially for Italy which relies on 425,000 barrels a day from Libya to keep its economy going.

From the EIA:
With domestic consumption of 280,000 bbl/d in 2009, Libya had estimated net exports (including all liquids) of 1.5 million bbl/d. According to 2009 official trade data as reported to the Global Trade Atlas, the vast majority of Libyan oil exports are sold to European countries like Italy (425,000 bbl/d), Germany (178,000 bbl/d), France (133,000 bbl/d), and Spain (115,000). With the lifting of sanctions against Libya in 2004, the United States has increased its imports of Libyan oil. According to EIA estimates, the United States imported an average of 80,000 bbl/d from Libya in 2009, up from 56,000 bbl/d in 2005 but, as a result of the U.S. economic downturn and subsequent decline in oil demand, 2009 levels were below 2007 highs of 117,000 bbl/d.





See also: Libya Declares Force Majeure on oil



This is going to be a big mess.


edit on 22-2-2011 by loam because: (no reason given)




posted on Feb, 22 2011 @ 02:18 PM
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reply to post by loam
 


It's like pouring gas on a bonfire!!! Hold on everybody.... This is some serious stuff going down.



posted on Feb, 22 2011 @ 02:21 PM
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As if OPEC needed another excuse to raise prices



posted on Feb, 22 2011 @ 02:22 PM
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More:

Case and point:



Milan bourse outage adds to fears over Libya

Confusion marred the trading of Italian shares on Tuesday after Borsa Italiana, the Italian exchange, was hit by an outage that delayed the opening of trading for more than five hours amid wider concerns over turmoil in Libya.

The outage, which left brokers unable to process orders, came a day after the main Italian stock market index had closed down 3.6 per cent, making it the worst performing European market on Monday.

Trading eventually started mid-afternoon on Tuesday, with the FTSE MIB Index closing down 1 per cent.


And:




Italy's close ties with Libya run deep

Few countries have as much at stake in Libya than Italy, an energy-poor country needing both Libya's oil and its cooperation in keeping potential boat people far from its nearby shores.

With Italy's Eni, the main foreign operator in Libya taking home a full one-third of the north African nation's oil and gas production, it is no surprise that a succession of Italian governments have sought a cozy relationship with Libyan leader Moammar Gadhafi — none less than the extravagant embrace by current Premier Silvio Berlusconi.

Italy's close geopolitical ties with Libya — and the fact its islands are just a few hundred miles (kilometers) from Libya's coast — has not brought only flows of oil, but also tides of less-welcome immigrants.

More...


edit on 22-2-2011 by loam because: (no reason given)



posted on Feb, 22 2011 @ 02:33 PM
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I am unfamiliar with the term . Is there anyone who can help me out.

Sorry for the ignorance. And thanks in advance.



posted on Feb, 22 2011 @ 02:36 PM
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Originally posted by Wetpaint72
I am unfamiliar with the term . Is there anyone who can help me out.

Sorry for the ignorance. And thanks in advance.

Wikipedia definition. See link for more info.

"Force majeure (French for "superior force"), also known as cas fortuit (French) or casus fortuitus (Latin),[1] is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term "act of God" (such as flooding, earthquake, or volcanic eruption), prevents one or both parties from fulfilling their obligations under the contract.[2] However, force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces (for example, predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated.
"


LINK



posted on Feb, 22 2011 @ 02:36 PM
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Relax, Libya oil crisis is no big deal - watchdog

Don't panic, the world has plenty of oil to cover any loss in Libyan production. That's the message the head of the International Energy Agency, the group formed to protect against global energy supply disruptions, sent the market on Tuesday.

"We have strategic stockpiles of 1.6 billion barrels and I know that OPEC has a good spare capacity," IEA chief Nabuo Tanaka told reporters at an OPEC oil ministers meeting in Saudi Arabia.



Now I KNOW I should be worried.


The article continues:




Gauging the market reaction, it appears Tanaka's message has fallen on deaf ears.

U.S. crude spiked over 7% Tuesday to $96.48 a barrel as violence swept Libya and traders fretted over the stability of other large oil producing countries in the Middle East.

...

What really has traders nervous, and is likely a driving factor behind Tuesday's oil price spike is if the violence spreads to Saudi Arabia. If that happens it'll be more than just Saudi spare oil at stake -- their massive 8 million barrel per day output could be at risk as well.



Saudi Arabia- So what is happening on that front?




Saudis Uneasy Amid Arab Unrest

In fact, last week, a very rare protest in the Saudi town of Qatif, where people went out on the streets because they wanted political dissidents released from jail. And in fact, the interior ministry did just that. Saudi and Riyadh said to me today that the government doesnt want to provoke any unrest in the eastern province, so they wanted to avoid any sparks of protests.



Proverbial finger in the dike?


These are some scary times....


edit on 22-2-2011 by loam because: (no reason given)



posted on Feb, 22 2011 @ 02:37 PM
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Qaddafi is just trying his best to be a pest while he is being shown the door....



posted on Feb, 22 2011 @ 02:40 PM
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There are many Pros and Cons to this.
It really depends on which way you look at it.

It almost makes me wonder if the Sauds really are playing a hand in this.
I mean we saw the photos of them getting of the chopper just yesterday. The helicopter even said Saudi on it, and they were flashing French credentials or something like that.

Ask yourselves.
If oil increases in price, who profits?

I know right? How weird because they are the ones Condemning this the loudest.

It's like the mafia showing up to the funeral of someone they just made a hit on, and giving the most flowers.



posted on Feb, 22 2011 @ 02:41 PM
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Its time to get yourself a motorcycle or moped cause just before the dollar crumbles in 2012 the price of oil will skyrocket.



posted on Feb, 22 2011 @ 02:41 PM
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Originally posted by Wetpaint72
I am unfamiliar with the term . Is there anyone who can help me out.

Sorry for the ignorance. And thanks in advance.


www.library.yale.edu...

Force Majeure literally means "greater force". These clauses excuse a party from liability if some unforseen event beyond the control of that party prevents it from performing its obligations under the contract. Typically, force majeure clauses cover natural disasters or other "Acts of God", war, or the failure of third parties--such as suppliers and subcontractors--to perform their obligations to the contracting party. It is important to remember that force majeure clauses are intended to excuse a party only if the failure to perform could not be avoided by the exercise of due care by that party.


Ignorance denied.



posted on Feb, 22 2011 @ 02:42 PM
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posted on Feb, 22 2011 @ 02:44 PM
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Originally posted by Skydancer
Its time to get yourself a motorcycle or moped cause just before the dollar crumbles in 2012 the price of oil will skyrocket.


The value of our paper currencies are based on the value of our liquid oil.

If oil plummets, that means the dollar can buy more of it.
If oil skyrockets, that means the dollar buys less of it.

Also, if you look up some history you will discover that the Dollar was Pegged directly to Oil during the Nixon Administration, while at the same time they finally got rid of the Gold standard. 1971 to be exact.



posted on Feb, 22 2011 @ 02:53 PM
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""Time magazine's intelligence columnist reported on Tuesday that Libyan leader Muammar Gaddafi has ordered his security forces to sabotage the country's oil facilities, citing a source close to the government.

In a column posted on Time's website, Robert Baer said the sabotage would begin by blowing up pipelines to the Mediterranean. However he added that the same source had also told him two weeks ago that unrest in neighboring countries would never spread to Libya -- an assertion that has turned out to be wrong.

"Among other things, Gaddafi has ordered security services to start sabotaging oil facilities," Baer wrote. "The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos."
""

www.reuters.com... ter

things are getting very dodgey.


and then we have canada and the 1 billion , yes, 1 billion signup bonus.

wikileaks.ch...



posted on Feb, 22 2011 @ 03:06 PM
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reply to post by JohnySeagull
 


Here is the TIME article:






Gaddafi's Next Move: Sabotage Oil and Sow Chaos?

There's been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos.

Two weeks ago this same man had told me the uprisings in Tunisia and Egypt would never touch Libya. Gaddafi, he said, had a tight lock on all of the major tribes, the same ones that have kept him in power for the past 41 years. The man of course turned out to be wrong, and everything he now has to say about Gaddafi's intentions needs to be taken in that context. (See TIME's exclusive interview with Gaddafi.)

The source went on and told me that Gaddafi's desperation has a lot to with the fact that he now can only count on the loyalty of his tribe, the Qadhadhfa. And as for the army, as of Monday he only has the loyalty of approximately 5,000 troops. They are his elite forces, the officers all handpicked. Among them is the unit commanded by his second youngest son Khamis, the 32nd Brigade. (The total strength of the regular Libyan army is 45,000.)



The article continues:




My Libyan source said that Gaddafi has told people around him that he knows he cannot retake Libya with the forces he has. But what he can do is make the rebellious tribes and army officers regret their disloyalty, turning Libya into another Somalia. "I have the money and arms to fight for a long time," Gaddafi reportedly said.

As part of the same plan to turn the tables, Gaddafi ordered the release from prison of the country's Islamic militant prisoners, hoping they will act on their own to sow chaos across Libya. Gaddafi envisages them attacking foreigners and rebellious tribes. Couple that with a shortage of food supplies, and any chance for the rebels to replace Gaddafi will be remote.

My Libyan source said that in order to understand Gaddafi's state of mind we need to understand that he feels deeply betrayed by the media, which he blames for sparking the revolt. In particular, he blames the Qatari TV station al-Jazeera, and is convinced it targeted him for purely political motivations. He also feels betrayed by the West because it has only encouraged the revolt. Over the weekend, he warned several European embassies that if he falls, the consequence will be a flood of African immigration that will "swamp" Europe.



Fascinating read.
edit on 22-2-2011 by loam because: (no reason given)



posted on Feb, 22 2011 @ 03:12 PM
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reply to post by ohioriver
 


Is this a blanket statement, or they just have the right to pick and choose who they do business with? Or is it just a wait and see situation.



posted on Feb, 22 2011 @ 04:07 PM
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Several market speculators indicate the recent grain futures sell off was triggered by the chaos and subsequent oil production shutdown in Libya. Whether the investors sought oil futures as more profitable or it's due to projected demands declining for grains and beef is still in debate.

In any event, I suspect they will ramp oil prices up to bubble status in the coming weeks.


Bubble Economics: The Illusion of Wealth
Mises.org





edit on 22-2-2011 by Regenmacher because: (no reason given)



posted on Feb, 22 2011 @ 04:16 PM
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Originally posted by loam
Relax, Libya oil crisis is no big deal - watchdog


LOL, whadda a load of spin. I wonder who's that directed at though? Anyone that believes that bull probably has zero liquidity to invest in the first place. Everyone is going to feel it at the pump too.

Highest Gas Prices in February Since 1990, Attributed to Libya Turmoil ABC News
edit on 22-2-2011 by Regenmacher because: (no reason given)



posted on Feb, 22 2011 @ 04:23 PM
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reply to post by Regenmacher
 


Yes, when I saw that piece, that is how I knew we were in a for a real ride.



posted on Feb, 22 2011 @ 07:35 PM
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Incredible story, thanks for posting. I heard about the possible sabotage on the radio today, I can't say this comes as a surprise. Imagine for a moment as this unrest sweeps across the mid east the impact if this same threat were carried out in Saudi Arabia. Whoa. We could see $130/barrel pretty quick, much like the summer of 2008.

brill




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