Venezuela is in chaos. Iran is grappling with US sanctions. And now there is a surge of violence in Libya. Trouble in these three OPEC nations has helped send US oil prices climbing back above $64 a barrel.
The latest OPEC turmoil amplifies the supply constraints imposed by the kingpin. Saudi Arabia has slashed production as well as exports to the United States in a bid to engineer higher prices and balance its budget, CNN reported.
Despite record-shattering US oil production, US oil prices have spiked 50% since plummeting to $42.53 a barrel on Christmas Eve. And gasoline prices are creeping higher just as the American economy grapples with a slowdown.
"The oil supply story is bullish," said Shin Kim, head of supply and production at S&P Global Platts. "The potential for an escalation of the conflict in Libya has renewed significant risks to oil production."
US oil prices hit a five-month high of $64.20 a barrel on Wednesday morning before retreating.
"I would not be surprised to see US oil prices hit $70 before mid-summer," said Ryan Fitzmaurice, energy strategist at Rabobank.
Brent crude, the global benchmark, is already above $71 a barrel for the first time since mid-November.