I’m not an expert in the crude oil market – but then you knew that. I have suspected, though, that there is a far closer connection between the price of oil and NATO’s military intervention in Libya. Below is a graph showing the fluctuations in the price of oil over the past 12 months (thanks to http://www.wtrg.com). On this graph I have added some major points from the timeline of the uprising (thanks to The Telegraph).

 

I cannot prove that there is a connection between these two things, of course, but the steep rise in oil prices did occur when the uprising began, got worse as things got really messy in Libya, and then comes down again quite sharply once the rebels gain control of Tripoli. And of course, it is quite clear that the rebellion would not have succeeded with the same speed – and might not have succeeded at all – without NATO’s help.

A little online research quickly uncovers why the West thought it right to intervene to help the rebels. Libya happens to be the 12th largest exporter of oil in the world and is a key member of OPEC – the oil producers’ organisation. When the war began and got messy Libya’s oil production almost ground to a halt and very little was exported. Add to this the unrest that was affecting other oil producing countries and the effect on the world stock markets back in early March this year was worrying analysts.

When the city of Benghazi was threatened by Gaddafi in February, it was Western European leaders who were loudest in their calls for military intervention. US President Obama took a back seat – though did eventually agree to send American forces to help – and was given credit at the time for being so different to George W Bush in his approach. But the difference between Europe and the US may have more to do with Libyan exports than anything else. According to the graph below (by the New York Times) some 85% of Libyan oil is exported to Europe while only 3% goes to the US.



With the Western economies still struggling to recover from the effects of the recession a steep rise in oil prices was the last thing they wanted earlier this year, and whilst ridding the world of Gaddafi is undoubtedly a good thing maybe we shouldn’t be so naïve to believe that the only thing on our leaders’ minds when they decided to intervene was humanitarian aid.


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