Libya has declared force majeure on its oil contracts, Reuters reported Tuesday, citing oil traders. The news follows Libyan leader Col. Moammar Gadhafi’s refusal to step down from his 41-year reign and deteriorating civil conditions in the country.
U.S. crude spiked over 7% Tuesday to $96.48 a barrel as violence swept Libya and traders fretted over the stability of other large oil producing countries in the Middle East.
Libya, a member of OPEC, produces about 1.6 million barrels a day; a sizable amount but just a fraction of the world’s overall 87.5 million barrel-a-day appetite.
