Libya Supply Disruption Could Push Oil to $130: Official

By: Reuters and CNBC.com

Libya's troubles created the country's worst energy crisis in decades and supply disruptions to world markets could push oil above $130 a barrel in the next month if troubles persist, Shokri Ghanem, chairman of Libya's National Oil Corporation, told Reuters Wednesday.

He did not specify whether he was referring to Brent or US light sweet crude.

Ghanem said crude oil output had dropped to 700,000-750,000 barrels per day after the flight of most of the foreign workers who make up about 10 percent of the Libyan energy industry's labor forces, including some in key positions. Before the crisis Libya pumped 1.6 million bpd.

Asked if Libya would resort to using oil as leverage, or a political weapon if the United States and other Western countries stepped up pressure on Libya over its handling of the revolt, Ghanem said:

"I hope we are not reaching any stage where we are talking about using this (oil) as a political force," he said. "We hope that all things will be solved before we go into any complications of any matters."

Oil markets will be watching closely to see if the departure of oil workers fearful of violence in Libya will further cut output in the world's 12th largest exporter.

Meanwhile, Muammar Gaddafi, facing calls to step down after a bloody crackdown threatening his 41-year rule, blamed al Qaeda cells for creating turmoil and said there was a conspiracy to control Libya and its oil.

Gaddafi said that oil fields in the OPEC producer were safe but foreign firms were concerned because of gangsters.

"The oil fields are secure ... but the companies are afraid," he said in a speech, adding that they feared "armed gangsters".

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