EUROPE and the US yesterday added to sanctions against Libyan leader Colonel Gaddafi as the international community continued its drive to squeeze him out of power.
The US has frozen $30bn of Libyan assets in the largest move of its type in history.
The EU also approved a package of sanctions banning the sale of military equipment from Libya and freezing foreign assets owned by Gaddafi – which some sources say could be worth billions of euros.
Brent crude futures for April delivery traded in London fell 42 cents a barrel yesterday to $111.72.
But Bank of America Merrill Lynch warned of “substantial upside risks to Brent oil prices over the next few months”. It said if oil prices hold at their current levels for most of 2011, energy as a percentage of GDP will remain at near record levels.
It added: “The price elasticity of global oil demand is very low... A 10 per cent increase in oil prices pushes down global oil demand by about 0.5 per cent.”
Coupled with a reluctance by central banks to increase interest rates in the short term, any further disruption in oil supply could send oil proces rocketing well over the $120 a barrel mark.
US secretary of state Hillary Clinton slammed Gaddafi yesterday, demanding the dictator steps down to avoid further conflict. She said: “We want him to leave and we want him to end his regime and call off the mercenaries and those troops that remain loyal to him.”
In a speech to the United Nations Human Rights Council in Geneva, she said Gaddafi must be “held accountable” for the brutal treatment of pro-democracy protesters, which Clinton said “violates international legal obligations and common decency”.
UK foreign secretary William Hague added that Libya had “failed shamefully in its responsibilities to its people”.
TIME LINE | HOW TROUBLE HAS HIT OIL PRICES
The resignation of president Hosni Mubarak in Egypt sparks protests in Benghazi, Libya’s second city.
Brent crude closes at $103.78 after trouble escalates in Libya. Protesters call for Gaddafi to step aside.
Hundreds die in Libya in the most violent day of protests so far. Trouble spreads to Yemen, Tunisia, Morocco Kuwait and Algeria.
Gaddafi vows to “die a martyr”, sending oil prices rocketing. Brent crude futures hit $106 a barrel as ports are closed. Saudi says it will meet any oil shortfalls.
Oil jumps to $112 a barrel. A Nomura analyst says it could hit an unbelievable $220 a barrel if Algeria halts production. Saudi faces its own problems, with its King forced to offer $22bn in handouts to stave off protests.
Oil price slips slightly to $111.72 a barrel, but trouble in Libya shows no sign of ending.