Wednesday, March 09, 2011

Libya oil sweet crude

Libya's oil reserves are the ninth largest in the world and they only produce around 2% of worlds oil but the issue is that is produces sweet crude oil. Petroleum is considered "sweet" if it contains less than 0.5% sulfur,compared to a higher level of sulfur in sour crude oil. This mean the process of refining the oil is much easier and cheaper and sweet crude is good for gasoline and high quality diesel.

The revolution in Libya is having a significant affect on sweet oil that is being produced in the world market. That is having an affect on the oil prices besides all the other unrest that is occurring in the Middle East. The majority of libyan oil goes to Italy.

So if the disruption of supply lasts a significant amount of time it will increase the demand of sweet crude which affects petroleum in vehicles which has significant negative affect on Gross domestic product. That must be why TPTB in America really want this issue in Libya to be resolved quickly.


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