Does the turmoil actually affect on crude oil supply seriously?
Libyan civil war caused crude oil supply disruption last year. The war cut the country's crude oil production from the previous 1.6 million barrels per day to zero. WTI crude oil prices surged from around $80/bbl to above $110/bbl following the disruption.
Libyan crude oil output, however, rebounded rapidly after the cease of the civil war. Although battles spread over whole countries, damages on oil related facilities were much smaller than expected.
Similar situations were seen during the Iraq War a decade ago. Crude oil production resumed immediately after the end of major combat operations. Iraqi crude oil production recovered the nearly same level with pre-war level within less than half year despite continuing minor battles in the nation.
Why severe supply disruption can be caused by demonstrations and riots in urban areas, despite oil output facilities are not damaged even during war?
Political stability of countries being democratized by the Arab Spring movements in last year has been lowered. Combined governments are easy to be affected by extremists. It is difficult for those governments to control turmoil.
Demonstrations for democratization were seen even in Persian Gulf oil producing nations, and protest activities against the anti-Islam film also occur there.
But unstable situations in Libya and Egypt and the dire situation in Syria, where turmoil and civil war have continued since early last year without intervention by international society, seem to calm down people's enthusiasm against democracy in Arab oil producing countries such as Saudi Arabia.
Democratization does not bring better results, people are likely to recognize that it causes deteriorated public security and spread of terrorism.
Therefore, current turmoil in the middle east may suppress democratization movements in regional oil producing countries. It seems to stabilize crude oil supply from the area as a result.
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