International executives and analysts meeting in London were nervously watching developments in the oil-rich region, worried about the sharp shock political unrest is giving to crude oil prices.
Oil prices rocketed on Monday after Seif al-Islam Gadhafi, son of Libyan leader Moammar Gadhafi, warned protesters on Sunday that they risked igniting a civil war in which Libya's oil wealth "will be burned." By early afternoon in Europe, benchmark crude for March delivery was up $3.10 to $89.30.
David Fyfe, head of the oil industry and markets division at the International Energy Agency, stressed that the IEA has reserves of 1.6 billion barrels of oil — equivalent to some 4 million barrels per day for the next 12 months — that could be brought onto the market if necessary.
The IEA has used government stocks to steady the oil market only twice before, during the Gulf War in 1991 and after Hurricane Katrina hit the Gulf of Mexico in 2005.
"It's very much a last resort, but it's worth pointing out that it exists and has been used before when supplies have been disrupted," he said.
"It's a sort of insurance policy for the market. Our view is that it isn't something that should be used for price management," he said.
Fyfe said the situation in the Middle East and North Africa was "of real concern," noting that the region accounts for 60 percent of global oil resources and 40 percent of global gas resources.
BP has suspended operations and is evacuating around 40 expatriate staff and their families amid the escalating violence — halting operations in the North African country just four years after the British company returned from a 30-year hiatus.
"Events in the Middle East are of intense concern as they continue to evolve," Ian Smale, group head of strategy and policy at BP PLC, said at International Petroleum Week, a key event on the oil industry's calendar.
"With specific regard to Libya, our first concern is our people and the security and integrity of our operations," Smale said at the Energy Institute-sponsored conference in central London.
Smale said Libya is not a major operating base for BP, but did not respond to questions about BP's partnerships with state-owned entities in the Middle East and North Africa.
BP signed a deal worth at least $900 million in 2007 to explore in Libya. It said it would monitor the situation on a daily basis and could not confirm when work would start again, but stressed that offshore operations in the region were still open and the closure would not impact oil production.
Norway-based Statoil said Monday it is pulling a "handful" of expatriate workers out of its office in Tripoli and Austria's OMV oil and gas company was pulling out 11 of its 15 Libya-based expatriates and their families. Poland's state gas monopoly PGNiG said it is evacuating 30 employees.
Italy's Eni gas and oil company said in a statment that it was evacuating nonessential personnel and family members of expatriate workers in Libya "as already scheduled following the early closure of schools in the country."
"At the moment, no problems at plants and operational facilities have been reported. The company's production continues as normal, with no effects on operations," Eni said, adding that it was reinforcing security measures for remaining employees and plants.
Royal Dutch Shell, whose operations in Libya are limited to exploration, said it has temporarily relocated dependents of expat staff out of the country.
Current unrest aside, Fyfe said that oil growth demand should slow this year to around 1.5 million barrels per day, down from 2.8 million barrels last year. He said there were a number of differences between now and the shortages and price rises that characterized 2008, including more spare capacity, more OPEC production and slowing oil growth after the post-recessionary bubble of that year.