Unrest in Libya has caused a global panic about oil. To make matters worse, no one knows, at this point, who will end up controlling oil reserves in Libya — the biggest in Africa — if Gadhafi gets ousted. Not surprisingly, international oil prices have skyrocketed, despite Saudi Arabia, the world’s largest oil exporter, stepping up and increasing its production of oil.

Saudi Arabia has, in fact, ramped up its output to at least 9m barrels per day by Friday, compared with the 8.6m daily barrels it produced in January.

The International Energy Agency said that Libya was still probably producing about 850,000 barrels of oil daily, down from its normal capacity of 1.6 million barrels — but that number wasn’t verifiable.

Currently Italy, France, Germany and Spain are the largest buyers of oil from the African country.

As a result Saudi officials are trying to compensate for the loss of supply from Libya.

According to the Financial Times, Saudi Arabia retained some 4m b/d of spare capacity before the onset of the Libyan supply crisis, accounting for about 75 per cent of the global surplus of some 5m b/d.

Now Saudi Arabia is hoping to use the spare capacity to calm international oil markets and make up for lost supplies from Libya.

While the assurances will make up for some amount of crude oil lost because of Libya, it is less than the total amount lost.

The crisis is as a good a time as any for America to move away from its dependence on oil and focus on alternative fuels. The price of oil isn’t likely to fall anytime soon and most experts say pump prices could go up to $4 this year.

As an increasing number of electric cars, hybrids and fuel-efficient sub compacts hit the market, hopefully consumers will take notice and finally change the way we use our resources.