Saudis cover Libyan oil shortage

Saudi Arabia has stepped in to cover oil shortages stemming from the unrest in Libya.

But the chief executive of state-owned Saudi Aramco, Khalid Al Falih, refused to say how much additional oil it has pumped into the market.

Libya produces about 1.6 million barrels per day and exports much of that to Europe. But the fighting has resulted in a 50% drop in production.

Saudi Arabia and other OPEC members have previously said they were ready to step in to compensate for any Libyan export losses.

Oil prices jumped above 99 dollars a barrel on Monday in Asia as Libya’s problems, along with protests in Oman, raised fears political upheaval could impact other crude exporters.

No one knows whether Muammar Gaddafi or the rebels trying to overthrown him will end up controlling Africa’s biggest oil reserves.

There are fears Libya could turn into a fractured nation with competing armed groups ruling over rich and remote desert fields lying hundreds of miles apart from each other.

The chaos in Libya as it descends into virtual civil war has sent international oil prices soaring despite the pledge from Saudi Arabia, the world’s largest oil exporter.

And that volatility is likely to continue, because it could take weeks or even months for Libyan production and exports to return to normal levels, experts said.

Hardest hit by the sudden oil shortage are European refiners that receive 85% of Libya’s exports, turning the country’s crude into diesel and jet fuel.