The oil price has jumped to its highest level since 2008 on Monday morning, amid investor concern that the violent protests in Libya and elsewhere in the Middle East could disrupt oil supplies. Libya exports about 1.1 million barrels of crude a day.
The price of a barrel of Brent Crude for April delivery rose 1.8 per cent to $104.39, while the price of US crude for March delivery jumped 1.7 per cent to $87.70 a barrel.
On Sunday, Seif al-Islam Gadhafi, son of Libyan leader Moammar Gadhafi, warned protesters that they risked igniting a civil war in which Libya’s oil wealth “will be burned.”. The uprising against the regime has reportedly spread to the capital Tripoli, prompting the broadcast from Gaddafi’s son.
Protesters seized military bases and weapons. In the eastern city of Benghazi, about 60 people were killed, while more than 200 have died since protests began a week ago.
Protests have continued in a number of other key oil-producing countries, including Bahrain and Iran, while speculation has mounted that unrest could spread to the oil-rich Saudi Arabia.
Oil traders have been monitoring recent protests in Iran, which is the second-largest crude exporter in the Organization of Petroleum Exporting Countries (OPEC) behind Saudi Arabia.
Some analysts have warned that the oil price is likely to rise further over the next few weeks if the violence continues and oil supplies are disrupted.
The steady rise in oil price since last summer is leading to higher fuel prices around the world. The continued increase is also leading to concern that a price consistently beyond $100 a barrel could impact the global economic recovery.