As 2011 opened, it appeared that rising food and other commodity prices were creating unexpected social unrest in North Africa that would rapidly spread to oil producing areas both there and across the Middle East. And indeed, as the protests against high costs changed to protests against bad governance, and as the so-called North African “Spring” moved from Tunisia to Egypt and on to Libya, oil markets were tangibly disrupted.
With civil unrest spreading to Bahrain, Syria and Yemen, it appeared for a while that further oil supply disruptions were not just possibly but indeed likely.
Today, even as the spread in protests seems to have been stemmed, and even as disruption in Libya continues, there is an air of expectations that at least as oil markets are concerned, the worst might lie in the past. But oil prices are telling a different story. They are indicating that while markets might be well supplied, expectations of future disruptions have been heightened and even though Saudi Arabia and other Gulf producers might have raised output to meet demand, there are concerns that more disruptions and higher prices lie ahead.