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The latest OPEC turmoil amplifies the supply constraints imposed by the decisive pillar of the deal. Saudi Arabia has cut production and exports to the United States in order to set higher prices and balance its budget.
"The history of the oil supply is bullish," said Shin Kim, head of sourcing and production at S & P Global Platts. "The possibility of an escalation of the conflict in Libya has renewed significant risks for oil production."
US oil prices hit a five-month high of $ 64.79 a barrel Tuesday morning before retreating.
"I would not be surprised to see oil prices hit $ 70 before the middle of summer," said Ryan Fitzmaurice, energy strategist at Rabobank.
Brent, a global benchmark, already exceeds $ 71 per barrel for the first time since mid-November.
"Severe security crisis"
The clashes in Libya in recent days are raising fears that the daily production of 1.3 million barrels of oil from the war-torn country is in jeopardy. The Libyan government, backed by the UN, said it had rebuffed the rebels' attack over the weekend after briefly losing control of Tripoli airport.
"OPEC's" problematic "child producer is facing a" serious security crisis, "wrote Helima Croft, Global Head of Product Strategy for RBC Capital Markets, in a note to clients .
The US military fired a contingent of trips from Libya this weekend, citing the country's "increasingly complex and unpredictable" security situation.
Libya's oil production has been on the sidelines for years due to a bloody civil war. But production has increased again in recent months.
The actual supply has not yet been affected, but oil traders are watching the situation closely.
"The market is getting nervous, if Libya were to come out, oil prices could easily rise from $ 5 to $ 10 above current levels," said Ben Cook, a portfolio manager at BP Capital Advisors.
Penalties and blackouts hit Venezuela
While Libya is at the center of concerns at the moment, unrest in Venezuela has been a more important factor of real supply problems.
The United States has never spent a full month without importing oil from Venezuela since the government started following this measure in 1973.
Meanwhile, oil investors hope the Trump government will cast doubt over the possibility of extending the exemptions that allowed countries to continue buying Iranian oil. The exemptions were announced last summer and contributed to an overabundance of supply that led to falling crude oil prices in a bear market.
"These waivers were largely dictated by political considerations," Cook said, noting the mid-term elections of last fall. "We do not have it this time."
OPEC and its allies will probably take the victory turn when the leaders meet in Vienna in June. The group's production cuts made it possible to raise oil prices rapidly.
Saudi Arabia has been particularly aggressive. The world's largest oil exporter has sharply reduced its shipments to the United States to demonstrate its commitment to balance the market.
What about the American boom in shale oil?
Another factor pushing up oil prices: bullish bets from hedge funds and other financial players.
After falling on oil last year, these traders who follow a trend have long opted for crude. These speculative positions may exaggerate price fluctuations.
"It was pretty dramatic," said Rabobank's Fitzmaurice. "With rising prices, all that money has been reinjected into the market, it's definitely an offer at a lower price."
US explosive growth should not end either. Raised by the shale oil boom, the EIA expects an average production of $ 12.3 million in 2019 and 13 million in 2020 in the United States.
How will Trump react?
However, Fitzmaurice doubts that such a measure is sustainable.
"I would expect that they are expecting the peak driving season before using their bullets," he said.
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