Category Archives: Libya

236. The price of oil: 6 – Libya and the Last Oil Shock

jack-up oil rig derrick by roadsofstone‘Paradoxically, the very worst outcome [for oil prices] might not be a sudden shock, but a milder recession. If this were to create some temporary spare oil production capacity by depressing demand, … the urgency of the need to prepare for the impending peak could easily be forced off the policy agenda…

As the global peak approaches and the market tightens, any sudden interruption of oil production could [then] spark the last oil shock.’
David Strahan (2007) — The Last Oil Shock (p. 177)

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In early 2009, I described the dramatic rise and fall of the oil price associated with the financial crisis of 2008, and looked at the future oil price trends which might follow recovery through into 2010.

transocean rather deepwater semisubmersible oil rig cromarty firth scotland by roadsofstoneTwo years on, economic uncertainty remains, and a return to growth is far from guaranteed. Yet across this time, the oil price has risen steadily. From a low of $40 in February 2009, Brent crude stands at well over $120 today.

The last time when the oil price was above $100, back in 2008, the economy was still booming. Three years later, during the long aftermath of the deepest global recession for eighty years, the oil price remains close to historic highs. How can this be possible?
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235. Libya and the Arab Spring

harsh morning Libya by akefaisal flickrIt was always tense at the Libyan border.

It took a couple of hours to get through the melée at the best of times. All humanity was there. Migrant workers, goat herds, farmers, businessmen. And secret police, too.

Once, on the way in, we were questioned by a mysterious officer with Carlos the Jackal sunglasses and a pistol beneath his leather jacket.

Libya road by duimdog at flickrdotcomIt was hard to feel comfortable under interrogation with $5,000 in cash stashed secretly inside my socks — the only way to pay a Tripoli hotel bill back then, in those days of the UN embargo.

Another time across the frontier at Ras Ajdir, the driver went the wrong way around an oil drum and we had to go right back to the start of the queue and start our two hour wait all over again.

abandoned car Libya one of many by Miles 78 flickrAnd getting into the country was just the beginnning. The five hour drive from Tunisia to Tripoli was easily the most dangerous trip I ever made.
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