The Sirte Oil Company's refinery in Brega, Libya.
The Sirte Oil Company's refinery in Brega, Libya.

Oil prices back on the rise over Libya supply fears

Increasing tensions in the Mena region are driving up oil prices again, with expectations rising of a complete curtailment of Libyan exports and falling spare capacity in Saudi Arabia.

North Sea Brent crude topped US$116 a barrel yesterday, jumping 2 per cent soon after the start of trading in London.

In New York, oil futures advanced by as much as 2.3 per cent to exceed $103 a barrel for the US benchmark crude, as concerns grew that allied air strikes in Libya threatened to prolong deep production cuts in the North African nation.

Analysts predicted crude would reach between $120 and $200 a barrel, depending which of various possible scenarios play out in the volatile region.

"The list of troubles in the Mena region keeps growing by the day," a Merrill Lynch report said. "There are simply too many fronts open at this stage and a more severe oil disruption cannot be ruled out."

Libya's crude output has fallen below 400,000 barrels per day (bpd), or about a quarter of its pre-crisis level.

Shokri Ghanem, the chairman of the country's National Oil Corporation and its de facto oil minister, said output could stop entirely, as the Libyan president Muammar Qaddafi vowed to repel attacks against military installations.

Analysts predicted Libya's exports of light, sweet crude, which is especially prized by European refiners, could be offline for at least a year.

"With the nature of the external military involvement becoming clearer, there is a further escalation of the situation and the damage to infrastructure might be larger, keeping Libya out of the oil market for longer," Amrita Sen, an analyst at Barclays Capital, told Reuters.

Other analysts had more dire predictions.

Crude could jump to $150 or more if Libya's revolution spread to Algeria, requiring Saudi Arabia to bring all of its spare capacity online to compensate, Shawkat Hammoudeh, a professor of economics and international business at Drexel University in the US, said in the current issue of Middle East Economic Survey.

US oil fell last week below $100 a barrel, dragged down by fears that Japan could face a long nuclear crisis after a devastating earthquake and tsunami hit its north-east coast.

Yesterday, workers at the site of the crippled nuclear power plant seemed to be gaining the upper hand after restoring power to pumps that circulate cooling water.

The easing of Japanese concerns allowed oil prices to return to the upward path that earlier took Brent crude close to $120 and New York oil futures near $105.

Other big oil consumers were also alarmed by crude's renewed rise.

"I [was] very surprised and shocked when I saw the international price of [US] oil has exceeded $100 per barrel," the Chinese premier Wen Jiabao told a group of visiting business leaders yesterday.

Mr Wen blamed the increase on Middle East unrest and loose monetary policies in "some countries".

Internationally, concerns seemed squarely focused on Saudi Arabia. Already, analysts estimate that Saudi spare capacity of about 4 million bpd before the unfolding Arab political crisis has been eroded to between 2 million and 3 million bpd.



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Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
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Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November

UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi


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Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
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Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
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Consumers: End-users of the financial product delivered

Distributors: Also known as embedders, these are the firms that embed baking services directly into their existing customer journeys

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Company profile

Company name: Suraasa

Started: 2018

Founders: Rishabh Khanna, Ankit Khanna and Sahil Makker

Based: India, UAE and the UK

Industry: EdTech

Initial investment: More than $200,000 in seed funding


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Tries: Gormley, Penalty
cons: Flaherty
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The Hong Kong Monetary Authority defines it as a bank that delivers services through the internet or other electronic channels instead of physical branches. That means not only facilitating payments but accepting deposits and making loans, just like traditional ones. Other terms used interchangeably include digital or digital-only banks or neobanks. By contrast, so-called digital wallets or e-wallets such as Apple Pay, PayPal or Google Pay usually serve as intermediaries between a consumer’s traditional account or credit card and a merchant, usually via a smartphone or computer.

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No, but the city is among the most cash-reliant major economies, leaving room for newcomers to disrupt the entrenched industry. Ant Financial, an Alibaba Group Holding affiliate that runs Alipay and MYBank, and Tencent Holdings, the company behind WeBank and WeChat Pay, are among the owners of the eight ventures licensed to create virtual banks in Hong Kong, with operations expected to start as early as the end of the year. 

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The details


Director: Wash Westmoreland

Starring: Keira Knightley, Dominic West

Our take: 3/5

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