As I was going down the road the other day, one of those “dummy” lights on my car came on. I know that many people don’t pay much attention to those things, but unfortunately it was the one that could not be ignored. It was the low fuel light. Now one might ask what this has to do with anything, just stop at a gas station and get some gas. Well they are right, it’s not a hard process, put the hose in the side of the car and give the attendant some money. Simple enough, right? Not when gas prices are currently hovering around four dollars a gallon. So what drives this idea that most Americans call price gouging?
One of the most involved current events that is having an effect on the oil prices here in the United States is the volatile political unrest in Northern Africa, most notably in Libya. Libya has the largest proven oil reserves in Africa with 42 billion barrels of oil and over 1.3 trillion cubic meters of gas. With only 25% of Libya’s surface territory explored to date there is every chance that actual reserves could see this figure dwarfed in coming years.
As Europe’s single largest oil supplier, the second largest oil producer in Africa and the fourth largest gas supplier in Africa, Libya dominates the petroleum sector in the Southern Mediterranean area and has potential to grow exponentially in the future.
More than fifty international oil companies are present in the market and together with subsidiaries of the Libyan National Oil Corporation (NOC) are contributing to the country’s current production capacity of two million barrels per day. NOC plans oilfield investment in the neighborhood of ten billion dollars over the coming three years to increase potential production (National Oil Corporation).
So what does this mean for the United States? Well as one can see that Europe is mostly dependant on Libyan oil, but due to the United States’ dependency on foreign oil, the market is affected. There are alternatives to try and reduce that...