Gadafi and his fellow deposed rulers in happier times (AP)
Today’s story is about the fall of Muammar Gaddafi, the mercurial leader of Libya for the the last 42 years and self-styled “king” of African kings.
The last 6 months saw an uprising that was a part of the “Arab Spring” that has swept away rulers of Tunisia and Egypt and provoked violent struggles and repression in Yemen and Syria.
As of today, rebel units control much of Tripoli, most of Gaddafi’s close aides have been captured or are on the run, and Gaddafi himself is nowhere to be seen.
President Obama’s strategy of assembling a NATO coalition to protect civilians and assist the revolution in Libya has now borne fruit, although the post-Gaddafi era will pose challenges as various groups within rebel ranks invariably jockey for power.
A key question for the U.S. consumer is the effect the rebel victory will have on the price of gas. Before the uprising began six months ago, Libya contributed 1.5 million barrels of crude oil per day, but this fell to nothing during the hostilities.
Libya has the largest oil reserves in Libya and the ninth largest in the world with 41.5 billion barrels of proven reserves as of 2007.
Most of the oil infrastructure has been kept intact during the fighting, so over the next few months, the price of oil will decline as oil production returns.
This should result in lower prices at U.S. gas pumps – all other things being equal as we enter the Fall and Winter. The benchmark Brent Crude fell $3 a barrel today with news that the conflict was ending. Expect to see further declines if Libya remains stable and oil production ramps up.
All in all, there should be better times at the gas pumps in the near future.
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