Likely impact of the Libyan crisis on oil prices

UN military action against Libyan leader Muammar Gaddafi has echoed the use of international force against Iraq under Saddam Hussein, but for the oil market the implications are very different.

A look at some of the issues at stake:

Effect on oil prices

Oil prices briefly spiked to a high of $39.99 before the US-led invasion of Iraq in 2003 and then dropped back.

After Iraq's invasion of Kuwait in August 1990, US crude climbed above $40 in October of that year and was falling by the time of the intervention of UN forces in January-February 1991, which ended the occupation.

Concern about the loss of oil from OPEC member Libya and the possibility of unrest across the Middle East drove Brent futures to a two-and-a-half year of nearly $120 last month.

They remain around $115, but analysts said the mood was cautious as traders tackled extreme levels of uncertainty.

Image: A Filipino activist wearing a mask to represent the US as a warmonger during a rally condeming the continued strikes by the US, Europe and other countries on Libya.

Text Reuters

AP Images