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Oil Flows as Rebels Gain

Libyan rebels pressed the regime of Col. Moammar Gadhafi Sunday, taking control of a key city near the capital of Tripoli, declaring a provisional government and allowing oil shipments to resume from territory under their control.

An oil tanker was expected to depart the port of Tobruk in the northeast corner of Libya sometime Sunday night carrying 700,000 barrels of oil, said Hassan Bulifa, a member of the management committee of Arabian Gulf Oil Co., Libya's largest oil producer and the only oil company based in the country's opposition-controlled eastern territory.

The management committee has assumed control of day-to-day operations at the company after its chairman, Abdulwanis Saad, resigned during the uprising against Col. Gadhafi. Mr. Bulifa said he believed the tanker would be bound for China.

The turmoil across the Middle East, cradle of much of the world's oil production, has sent prices soaring. Last week, crude oil for April delivery on the New York Mercantile Exchange rose $8.17 per barrel, or 9.11%, to $97.88, and for the seventh time since 1982 prices jumped 10% within two days. Month-to-date, U.S. benchmark crude is up 6.17%.

he National Oil Co., which is based in Tripoli and remains under the control of Mr. Gadhafi's government. Nevertheless, the relaunching of exports would be good news for Arabian Gulf Oil, which has had to cut back production rates for fear of running out of storage capacity amid a lack of export outlets.

The developments in Libya came on another turbulent day in the Middle East. Oman, a small sultanate at the mouth of the oil-rich Persian Gulf, had its first protests, in which at least one person was killed. Riots broke out in Tunisia, the country that started the wave of uprisings in the region. The prime minister there, appointed only a few weeks ago, resigned after several days of street violence.

In Libya, the pledged Arabian Gulf Oil shipment was a rare bright spot amid signs the industry is faltering badly as expatriate workers leave and many local workers stay home, fearing growing violence. The United Nations refugee agency said more than 100,000 people have fled violence in Libya to other countries in the past week.

Over the weekend, the government failed in repeated attempts to regain ground in the strategically important coastal city of Misrata. Libya's third-largest city, it is located between Tripoli and Col. Gadhafi's hometown of Sirte, raising questions about the strength the leader's remaining loyalist forces.

But areas near Tripoli weren't as quiet. Foreign journalists taken on a government-sponsored tour of Al-Zawiya, to the west of Tripoli—which last week witnessed bloody clashes between opposition and pro-Gadhafi security forces—entered the center of town to see the tricolored flag that predated Col. Gadhafi's 1969 revolution flying.

"This council was created in defiance of Gadhafi's claim that there will be chaos after he leaves," said the spokesman, Abdul Hafidh Gogha. "There is no chaos. In just 10 days we managed to cross the hard times and create local councils to govern." Read more at professional.wsj.com

 

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