The Arab revolution is circling around the region’s oil, and there’s talk of nationalizing or strengthening state control of industries in Egypt. So far, the Arab revolt has been mostly non-ideological. But at stake is the incalculable wealth of a long-suppressed region.
With Bahrain, the anchor of the US military presence in the gulf, wobbling, and with the seeds of revolt planted in Kuwait, the revolt in Libya could provoke a burst of Arab nationalism aimed at taking control of the Middle East oil resources. With Tripoli, Libya’s capital, in flames and Benghazi and most of Libya’s eastern region already in rebel hands, there are reports that the holdings of ENI and other oil firms operating in Libya might be nationalized by a new government.
Reports Bloomberg: “Certainly all the oil majors will be shaking if the new leaders decide to nationalize everything.”
Oil prices have jumped sharply since the Libyan revolt began, and ENI is scared silly.
“Libya sits atop large reserves of oil and gas that have yet to be developed. Libya holds around 44 billion barrels of oil reserves—the largest in Africa—according to Oil and Gas Journal, an industry publication.”
ENI, which gets one-seventh of its oil from Libya, and another big chunk from nearly Egypt, is evacuating its personnel, and its stock plummeted:
"Eni said yesterday it has already begun to evacuate non-essential staff and dependants. The company, which gets another 13 percent of its production from Egypt and has smaller operations in Tunisia and Yemen, has said it continues to operate in all the countries affected by political unrest."
BP, too, is evacuating its oil workers from Libya.
Libya produced about 1.6 million barrels of oil in January, roughly two-thirds of Iraq’s total output and one-fifth of Saudi Arabia’s. The country supplies about 10 percent of Europe’s oil supplies, and Italy’s ENI oil company is vastly dependent on Libya.
Bahrain, which doesn’t produce much oil now, is a lynchpin of the Persian Gulf’s Arab states, and the gateway to Saudi Arabia. The Saudis, who’ve pledged to produce more oil to make up any shortfall from the Arab-wide turmoil, have threatened to use any and all means to shore up Bahrain’s regime. But increasingly Saudi Arabia is surrounded, by unrest in Egypt, Yemen, Bahrain, Djibouti, and possibly—starting on March 8—in Kuwait. In addition, there’s trouble in Jordan, and Saudi Arabia isn’t on good terms with Iraq.