(THE TELEGRAPH) — Libya’s civil war has cut global crude supply by 1.1m barrels per day (bpd), eroding Opec’s spare capacity to a wafer-thin margin of 2m bpd, if Goldman Sachs is correct.
While there has been no loss of oil output in the Gulf so far, the violent crackdown in [Bahrain] on Wednesday left four people dead and risks inflaming the volatile geopolitics of the region. The risk group Exclusive Analysis said such heavy-handed methods may provoke Iran to launch a proxy war by arming insurgents.
Oil prices have fallen over recent days but it may not be long before the deepening nuclear crisis in Japan and Germany’s decision to shut down seven of its oldest reactors starts to spill over into oil and gas markets.
Even if the world navigates today’s crisis without an energy shock, a more intractable long-term crisis is brewing. Several countries are already turning their backs on the “nuclear renaissance” and shelving plans for fresh reactors. This implies a need for substitutes that will further strain fossil fuel supplies and bring forward the long-feared energy crunch.