Hardly a day goes by now without reports of new demonstrations against the established order in some corner of the world. What started in Tunisia, spread to Egypt, has now metastasized in many Middle Eastern states. Even China seems to be to be vulnerable to popular uprisings made possible through widespread access to the Internet, social networking and cell phones.
So far Libya is the only major oil exporting country in which the upheavals appear likely to threaten oil exports in the near future. Benghazi in eastern Libya has fallen into the hands of the demonstrators and a local tribal chief is threatening to cut off oil exports unless Tripoli stops using violence against demonstrators. Libya exports about 1.5 million b/d most of which goes to Europe.
Over the weekend there were demonstrations in Yemen, Tunisia, Morocco, and Djibouti. Iranian security forces violently suppressed attempts at demonstrations in Tehran and other cities. The rebellions are moving so fast it is difficult to believe that at some point, some nation’s oil exports will not be interrupted, either by internal developments or possibly by trading partners outraged by the brutality of the repressions.
Initially there was general agreement that the gulf oil kingdoms that have large oil revenues in relation to the size of their populations would not be as vulnerable to popular unrest. Developments in Bahrain last week, where the majority of Shiites rebelled against their Sunni rulers, are casting doubts on this thesis. There are already reports of small demonstrations in Saudi Arabia where a minority of 2-3 million Shiites has long been discriminated against by the kingdom’s Sunni majority.
Continued suppression of mass demonstrations by police and military forces will depend on the loyalty of these forces to the government ordering the violence against its citizens. In Libya we have reports that military units in the east have joined the demonstrators and religious leaders are calling on security forces not to attack fellow Muslims. This outbreak of popular discontent with oppressive governments clearly has a long way to play out and could easily result in interruptions, perhaps even large ones, to the world’s oil supplies.