Meanwhile, back in MENA…
At the same time, when it comes to high-quality crude, there are political risks closer to Libya as well.
Such as Algeria – home of Algerian Condensate, Saharan Blend, and other excellent, light, low-sulphur products. Like Nigeria, Algeria is recovering from a long period ofpast conflict. While BarCap think it’s actually fairly middling in the risk stakes, protests bubble under the surface and Algerians are calling for freedom. Once again, the unrest comes at a critical juncture for foreign investment (chart via BarCap):
In fact, BarCap worry more about Iraq (again, an established area of conflict, plus a weak oil infrastructure) and Oman. On the latter — if you’ve not read the chilling dispatch from the FT’s Simeon Kerr, we’d suggest you do so. It’s a vivid reminder of the tensions underlying the Gulf monarchies at the moment.
Needless to say, foreign investment has been key to arresting Oman’s declining oil production rates over the last decade, too.
Pressure at the global margin of spare oil supplies, volatile foreign investment – and a lot of political risk that should never really have been forgotten in the first place.
Somehow, we doubt the (hopefully rapid) exit of Colonel Gaddafi will assuage the oil market.
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