Libyan leader Moammar Gadhafi says his country's oil fields are secure, but that foreign oil companies are worried they might be attacked by “armed gangsters.”
The Libyan leader said Wednesday in a speech in the capital Tripoli that international oil firms are “afraid” about continued operations as fighting for control of the country continues. But Mr. Gadhafi said Libya's oil fields and ports are “safe” and “under control.”
He made the comments even as his government forces were fighting with rebels over control of the oil refinery city of Brega on the Mediterranean coast about 740 kilometers to the east of Tripoli.
A Libyan oil official said that exports from the rebel-held eastern portion of the country are proceeding normally. But other Libyan and oil industry officials say the country's 1.6-million-barrel-a-day oil production has at least been cut in half during the unrest. Some analysts say that the country's oil production has been reduced to a trickle of exports.
Libya produces only about 2 percent of the world's oil supply. But traders and some world officials fear that the political upheaval in the Mideast will spread to other oil-producing countries.
That has led to sharp increases in the price of oil on world markets, with the price for Brent crude topping $116 a barrel in London. Oil moved above $100 a barrel in New York trading, near its 29-month high.
Some Western government officials and oil analysts have voiced the fear that continuing political turmoil in the Middle East will push oil prices even higher. Further increases could sharply curtail the world's recovery from the 2008-2009 global economic recession. With the higher price for crude oil, businesses and consumers alike are being forced to pay higher fuel prices for industrial production or filling their cars' gas tanks.
Saudi Arabia, the world's largest oil exporter, says it will increase its production to account for the reduction in Libyan output. It offered two European refiners additional oil, but one of the refiners turned down the offer because the quality of the Saudi oil did not meet its requirements. The other refiner is still considering the Saudi offer.