Why do oil prices increase as soon as there is war in a country?
Oil prices increase with problems that threaten supply. The current world problems in Libya and the Middle East could impact oil production and shipments from both of these areas. The Center for Strategic & International Studies (CSIS) reported on March 9, 2011 reported that “estimates of current shut in production vary from a low of 500,000 barrels/day (b/d) to over 1 million, from a total production of 1.6 million barrels/day (mmb/d). Company withdrawal of expatriate production workers appears to be a major contributing cause of the production decline, not damage to producing fields, although other factors are in play.” J.P. Morgan said that U.N. sanctions have effectively imposed an embargo on Libyan exports. Based on the experience in Iraq, we continue to emphasize Libyan production will remain low and volatile for many years. The situation in the rest of the Middle East has also created unrest. The Middle east supplies more than 30% of the world’s oil and contains 57% of global oi
