Source: Financial Times, 11th September 2011

Regime change in Libya ought by now to have been priced in to a barrel of oil. After climbing 23 per cent in the wake of the revolution, Brent crude has given up about half its gains. Whether it has been fully priced in to oil company shares is another matter. Eni and OMV, the European oil companies that are the biggest international producers in Libya, have turned in negative total returns of 15 per cent to date this year, with Repsol , another big producer, also trailing the sector. Libya accounted for only 2 per cent of global oil production in 2010, and most of the downside may already be in the share prices. But the Libya discount will not disappear just yet.