Political instability in Libya has been worsening after the UN Security Council Resolution 1973 was applied. The members of the UN Security Council and NATO have been divided into diverging opinion in interpreting the resolution.
In principle, this will be a bad precedent to the other destabilizing Middle East countries. Despite political unrest, both economic and social unrest in Libya drive an unexpected impact, especially in the surge of the oil prices.
Libya’s chaos is not only caused by domestic political misconduct. This time revolution has a brand new motive while it could not be found in the previous revolutions in Tunisia and Egypt. The writer has long predicted that Libyan Revolution would bring about international engagement into the zone, warned by the docking of two US warships alongside the Mediterranean Sea. This revolution has a strong connection with the politics of energy security.
World admits that Libya’s contribution to the world oil supply provides less than 3 percent, yet covers more than a half in the region’s oil production. In fact, oil price has reached US$110 per barrel, the highest in the last 31 months. On the other side, IMF predicted that for every 10 percent rise in oil price, world growth will plunge not less than a quarter percent.
If we wholly examine the map of conflict, there are up to 6 percent of the Libyan oil refinery and production chain that are closed because of the social unrest. Another great disaster from the outset is the seizure of five primary ports that covered 80 percent of oil export-import by opposition that have long been intruded by the rebellion movement (The Economist, March 5, 2011). If we referred back to the oil boom of the 1970s, the main problems did not rise from the production chain but from the barrier of access, where Saudi Arabia and Egypt sealed the sea lane.
In the past revolutions there was no sign of an international engagement since the ship-lane and port of entry have been clearly protected and sterilized from the conflict zone. Meanwhile, the blockade of the ports and ship-lane by the rebel is anxiously predicted to be shortly spread to the rest of Arabs, especially Saudi Arabia, Kuwait and Bahrain, in which the primary installation of world oil supply is located.
Michael Klare (2004) and John Perkins (2007) said that the ongoing authoritarian regimes in Africa and the Middle East were the product of the American energy security policy since World War II. In contrast, the International Energy Agency announced that OPEC member states had been experiencing a year-on-year declining trend of oil production.
History has proved, since the 1970s, that the state had made many policies in securing its energy supply. Let’s use an example, the US had long been cooperating with her allies in Middle East by thrusting $14 billion toward the regime’s military build-up in securing energy. Furthermore, this money is used for combating the “leftists” rebellion in Dhofar, Oman; also fighting the revolutionary movement in South Yemen.
As a matter of fact, there is gradual declining oil consumption in the developed OECD member states. The US Energy Information noted that US’ energy-intensive industries currently contribute the least compared to the other non-energy intensive industries. They contribute less than 1.5 percent annually (Annual Energy Outlook, 2010).
The most reasonable intervention in Libya can only be inferred from the efforts in retaining the global recovering economy from pulling-back down since the global financial meltdown. Energy consumption in newly industrialized countries such as China, India, Brazil and Russia as the global economic buffer, has been experiencing an upsurge. For this reason, these regions will suffer more than Western countries if the prices keep going up.
The rise of the oil price can also increase the fiscal risk of many developing countries. Based on recapitulation undertaken by IEA, in 2009 all countries spent $312 billion only to subsidize their energy sector.
In Indonesia, every $1 increase of world oil prices tended to increase Rp 2.8 trillion ($327,696,180) spending on oil subsidy while the government and the House of Representatives have announced that the fiscal budget on 2011 is not enough to cover a subsidy.
The Libya Revolution has to be differed from the two previous African revolutions. Social unrest, indicated by the blockade of trade access and oil transportation, has to be firmly handled.
If this happened in the Gulf of Oman, which has now been spreading to Yemen, it will raise energy insecurity not only in Western countries but also the whole world. There should be a serious political will both from Libya’s government and the international society to understand the abovementioned implication if it is not stopped soon.
Source: www.thejakartapost.com
In principle, this will be a bad precedent to the other destabilizing Middle East countries. Despite political unrest, both economic and social unrest in Libya drive an unexpected impact, especially in the surge of the oil prices.
Libya’s chaos is not only caused by domestic political misconduct. This time revolution has a brand new motive while it could not be found in the previous revolutions in Tunisia and Egypt. The writer has long predicted that Libyan Revolution would bring about international engagement into the zone, warned by the docking of two US warships alongside the Mediterranean Sea. This revolution has a strong connection with the politics of energy security.
World admits that Libya’s contribution to the world oil supply provides less than 3 percent, yet covers more than a half in the region’s oil production. In fact, oil price has reached US$110 per barrel, the highest in the last 31 months. On the other side, IMF predicted that for every 10 percent rise in oil price, world growth will plunge not less than a quarter percent.
If we wholly examine the map of conflict, there are up to 6 percent of the Libyan oil refinery and production chain that are closed because of the social unrest. Another great disaster from the outset is the seizure of five primary ports that covered 80 percent of oil export-import by opposition that have long been intruded by the rebellion movement (The Economist, March 5, 2011). If we referred back to the oil boom of the 1970s, the main problems did not rise from the production chain but from the barrier of access, where Saudi Arabia and Egypt sealed the sea lane.
In the past revolutions there was no sign of an international engagement since the ship-lane and port of entry have been clearly protected and sterilized from the conflict zone. Meanwhile, the blockade of the ports and ship-lane by the rebel is anxiously predicted to be shortly spread to the rest of Arabs, especially Saudi Arabia, Kuwait and Bahrain, in which the primary installation of world oil supply is located.
Michael Klare (2004) and John Perkins (2007) said that the ongoing authoritarian regimes in Africa and the Middle East were the product of the American energy security policy since World War II. In contrast, the International Energy Agency announced that OPEC member states had been experiencing a year-on-year declining trend of oil production.
History has proved, since the 1970s, that the state had made many policies in securing its energy supply. Let’s use an example, the US had long been cooperating with her allies in Middle East by thrusting $14 billion toward the regime’s military build-up in securing energy. Furthermore, this money is used for combating the “leftists” rebellion in Dhofar, Oman; also fighting the revolutionary movement in South Yemen.
As a matter of fact, there is gradual declining oil consumption in the developed OECD member states. The US Energy Information noted that US’ energy-intensive industries currently contribute the least compared to the other non-energy intensive industries. They contribute less than 1.5 percent annually (Annual Energy Outlook, 2010).
The most reasonable intervention in Libya can only be inferred from the efforts in retaining the global recovering economy from pulling-back down since the global financial meltdown. Energy consumption in newly industrialized countries such as China, India, Brazil and Russia as the global economic buffer, has been experiencing an upsurge. For this reason, these regions will suffer more than Western countries if the prices keep going up.
The rise of the oil price can also increase the fiscal risk of many developing countries. Based on recapitulation undertaken by IEA, in 2009 all countries spent $312 billion only to subsidize their energy sector.
In Indonesia, every $1 increase of world oil prices tended to increase Rp 2.8 trillion ($327,696,180) spending on oil subsidy while the government and the House of Representatives have announced that the fiscal budget on 2011 is not enough to cover a subsidy.
The Libya Revolution has to be differed from the two previous African revolutions. Social unrest, indicated by the blockade of trade access and oil transportation, has to be firmly handled.
If this happened in the Gulf of Oman, which has now been spreading to Yemen, it will raise energy insecurity not only in Western countries but also the whole world. There should be a serious political will both from Libya’s government and the international society to understand the abovementioned implication if it is not stopped soon.
Source: www.thejakartapost.com
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