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Libya a Threat to Oil Supply?

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    Barclays director of commodities research Helima Croft on oil production and Libya.

  • Duration 3:16
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Thank you -- so if you've -- concern about Iran and a potential oil supply disruption.

It's time to start worrying about Libya.

One of our favorite gasoline -- -- here director of commodities research at Barclays joining us with more why Libya and now elections.

-- collections are starting their going to be local elections and Benghazi and Tripoli and bank but national elections in June and we're very concerned because.

Libya is still a Washington weapons and -- Washington militia groups they're between 3500.

Armed groups and Libya there -- -- central authority.

And were concerned about spoilers in the election process.

-- -- In speaking of oil production oil production has gotten back issues pre crisis levels hasn't not.

But why would we be then be concerned just because of the damage done the facilities the need for the foreign oil companies of our investment com.

Back into the country I mean securing the top counts how many -- allow companies they singled -- as -- single biggest issue.

And -- if you did have a deterioration in the security environment there.

We could see their recent gains reversed because if you have a situation we don't have a functioning military you don't have a functioning police force.

And you have militia groups fighting it out near oil field.

Foreign companies in particular shot in production but if you don't have a functioning government it's hard it budgets passed.

All the enabling environment for successful production will stop -- How much potential upside in the price of oil.

Could we see just based on the situation would think -- is not really being assessed by the oil markets right now a lot of concern about Iran is actually -- -- I think people look at the production numbers in -- and say the stories over.

-- without a nasty shock about Libya in June I think you could see upside pressure it would certainly -- the Europeans because that's where Libyan production -- -- would you think though because you see an Iran that is being more conciliatory.

Do you think that that is factored into the price on the downside is looking at will today is still above -- 104 dollars barrel.

I think we're trying to -- bit of a softening but you should really watch for the may 23 meeting in Baghdad.

Because if -- -- ronning and offers significant concessions they're could potentially be a delay in the implementation of the EU oil embargo on July 1.

And that could certainly -- a bit of a softening of prices come much of a softening you think and you -- you think that Iran is is legitimately.

Giving in horse that your -- softening in that when you have -- Ronnie officials basically.

Praising -- last meeting that took place in Istanbul they're not as bellicose as they -- You for the rest of this year so I think that potentially Iran and are reeling under these sanctions and they -- on a string things along I don't think they wanna be -- this year so I think they're willing to make.

You misconceptions -- sound like they're making concessions to play for time.

But on the downside how low can oil -- you think if things go well with Iran well.

In Libya with the elections well you know I think the problem isn't supply and demand picture still remains quite tight and you the saudis essentially.

Producing at high levels historically high levels right now.

Did you get any problems out annual markets there's no spare capacity and we have a host the situation whether -- Nigeria Sudan.

Yemen oil trouble spots and those are not gonna go away and that's we're focused on Libya could that could be another nasty shock.

And another reason that we love you could you -- line use the word bellicose thank you into a -- --

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