Here's the latest:
At least 300kbd-400kbd of oil production are shut-in already, and likely more, but the situation is still confusing.
As much as a quarter of Libyan oil output has been shut down, Reuters calculations showed on Wednesday, as unrest prompted oil companies to warn of production cuts in Africa's third-largest producer.
Austria's OMV said on Wednesday it might be heading for a full production shutdown in Libya. Total, Repsol, Eni and BASF have also said they are either slowing or stopping output.
The latest comments point to a growing impact on oil output from Libya, which produces 1.6 million barrels per day (bpd) of high-quality oil, or almost 2 percent of world output. About 1.3 million bpd is exported, mainly to Europe.
According to Time Magazine's Robert Baer, anonymous sources close to Gaddafi say he is now giving orders to sabotage Libya's oil industry:
There's been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos.
Libyan ports are shutting down:
Libyan cargo port operations have shut down due to increasing violence sweeping the country, Reuters has reported.
Operations at Tripoli, Benggazi and Misurata Mediterranean ports, which handle general cargo and container shipping, have closed.
In particular, oil exports appear to be halting completely:
Operations at Libyan oil ports were disrupted by a lack of communications, trade sources said, and flows from marine oil terminals in Libya were halted on Tuesday, an Italian government source said.
"The situation is worrying. This morning the oil terminals were blocked in Libya," the government source said.
It was not possible to get through by phone to Libyan oil ports or shipping agents on Tuesday.
"Everything is out," said a source with a major oil company. "We can't get through to anyone. Our operations people say contact is impossible with the shipping agents, port officials, anyone. The lines are all down."
The country appears to be descending into civil war:
Col. Muammar el-Qaddafi of Libya kept his grip on the capital on Wednesday, but large areas of the east of the country remained out of his control amid indications that the fighting had reached the northwest of the country around Tripoli.
Libyans fleeing across the country’s western border to Tunisia reported fighting over the past two nights in the town of Sabratha, home of an important Roman archeological site 50 miles west of Tripoli. Reuters reported that thousands of Libyan forces loyal to Col. Qaddafi had deployed there.
“The revolutionary committees are trying to kill everyone who is against Qaddafi,” said a doctor from Sabratha who had just left the country, but who declined to give his name because he wanted to return.
Of course, as for the oil production losses, the Saudi's say they stand ready to make up the difference:
“OPEC is ready to meet any shortage in supply when it happens,” the Saudi oil minister, Ali al-Naimi, said at a news conference after a meeting of ministers of oil producing and consuming nations in Riyadh, Saudi Arabia. “There is concern and fear, but there is no shortage.”
The next few months' oil statistics are going to be interesting, to say the least. It now seems increasingly likely that Libya's oil production (about 1.6mbd) is largely going to halt, or at least not get exported. So we will see if Saudi Arabia's production really will rise to compensate. The problem, of course, is that Mr al-Naimi's idea of what constitutes a "shortage" may not be the same as the rest of us.