Markets shaken by Middle East revolts

Oil, gold and silver prices soared yesterday as turmoil in the Middle East and North Africa sent shockwaves through financial markets.

Crude jumped to its highest level since 2008 as violent clashes in oil-rich Libya fuelled fears of a disruption to supplies.

Gold, a safe-haven in times of global unrest, rose above $1,400 an ounce for the first time in nearly seven weeks as tensions in the region mounted.

Turbulent times: Protesters in the Libyan port of Benghazi, the centre of the country's oil industry

Turbulent times: Protesters in the Libyan port of Benghazi, the centre of the country's oil industry

Other precious metals also rallied amid fears the protests could escalate, with silver powering its way to its highest level for more than 30 years.

Stock markets around the world went into reverse - the FTSE 100 index fell 68.19 points to 6,014.80 - as investors dumped more risky assets.


The bloody uprising in Libya is one of a series of revolts that have spread across the Arab world since December, engulfing countries from Tunisia and Egypt to Yemen and Bahrain.

Joshua Raymond, a market strategist at spread-betting firm City Index in London, said: 'Traders hate uncertainty and whilst they appeared to digest the continuing unrest in the Middle East with ease last week, the escalation in both violence and unrest in Libya has convinced traders to flee risky asset classes and seek safe-havens.'

Libya is the most oil-rich state in Africa and exports 1.1m barrels of crude a day, making it the world' s 12th-biggest oil exporter.

BP suspended its operations in Libya and, along with British rival Shell, is pulling people out of the country.

BP chief executive Bob Dudley said: 'We are watching this very closely. Dependents [of company staff] have left the country.' Brent crude rose nearly 3 per cent in London to more than $104 a barrel, its highest level since before the financial crisis.

Higher oil prices look set to push up the cost of everything from fuel and household energy bills to food.

Analysts warned that if the violence continues, the price of oil could rise by another $30 a barrel and push the global economy back into recession.

British business had hopes that Libya would be a lucrative new export market after Tony Blair's meeting with Colonel Gaddafi in a desert tent in 2004 led to the restoration of diplomatic relations.

But UK companies have struggled to establish themselves in the country.

The Libyan British Business Council, an organisation set up in 2004 by the then foreign secretary Jack Straw, claims a long list of members, but few of those named appear to have any significant operations there.