The impact of a Western military strike on Syria wouldn’t necessarily have a big impact on supply or oil prices.
Energy writer Steve LeVine made the case this week that the real places to watch are Libya and Nigeria, both of which could suffer bigger disruptions that could send crude prices skyward.
LeVine reports on the global petroleum industry for the Atlantic Monthly’s news and commentary site, Quartz. He’s the author of The Oil and the Glory, a best-selling book about the history of oil told through the 1990s-2000s oil rush on the Caspian Sea.
For the situation in Syria to affect global oil, LeVine wrote, ‘hostilities would have to spill into Iraq (a bombing of the Kirkuk-Ceyhan oil pipeline), the Strait of Hormuz (which channels 17 million barrels of oil a day, a fifth of the world’s oil supply) or Saudi Arabia (a roiling of local Shias).’
Look instead to Libya and Nigeria, LeVine said.
Gunmen in Libya this week forced closure of pipelines carrying 452,000 barrels of oil a day from fields operated by Italy’s Eni and Spain’s Repsol. The gunmen are demanding cash and vehicles in exchange for restoring the oil flow, deputy oil minister Omar el-Shakmak said.
Libyan production has fallen from 1.6 million barrels a day after the regime change to about 300,000 barrels of oil a day.
Nigeria has seen an escalation of oil theft, LeVine said.
Nigeria’s oil production, LeVine said, is down to 1.9 million barrels a day from about 2.1 million barrels a day last year, a four-year low. By some estimates, the country is losing a massive 150,000 barrels of oil a day to theft carried out in connivance with officials, who allow barrels to be loaded onto tankers and shipped abroad. According to one estimate, Nigeria lost $10.9 billion in oil sales from 2009 to 2011.