Blood money: Libyan uprising sees oil price surge
The oil price surged more than $2 a barrel to its highest for more than two years today as Libya's bloody uprising sent shockwaves through markets.
Brent crude for April delivery surged up to $105.08 at one point - the highest since September 2008 - in a spike which will squeeze motorists, pile on cost pressures for business and add to the Bank of England's inflation worries.
Libya produced 1.7 million barrels of oil a day in 2009 and accounted for just over 2% of world production. At 44.3 billion barrels, it also accounts for 3.3% of world oil reserves.
Seymour Pierce oil analyst Brendan D'Souza said there are concerns unrest could spread to Saudi Arabia - which has so far seen only low-key protests - and said crude could hit $110 a barrel after rising more than 10% since the beginning of the year.
"What is going on Libya is far more serious than the previous problems in Tunisia and Egypt," he warned.
The unrest threatens the prospects of 150 British businesses currently operating in the country including blue-chips British Airways, BP, Royal Dutch Shell and GlaxoSmithKline.
Trade between the two nations since Libya lost its pariah status grew to £1.5 billion in 2009, but BP - which signed a major oil exploration agreement there in 2007 which the then Prime Minister Tony Blair helped to co-ordinate - was today preparing to pull out non-essential staff and their families.
A host of British engineers and construction firms are also active in Libya as the country invests in revamping its ageing infrastructure.
Export group British Expertise led a construction mission to Libya last year, but Middle East director Dominic James said: "At the moment we don't envisage going back there in a hurry.
"Certainly sentiment on Libya is going to change, it will definitely have an impact."
