Libya's Significance, by Mouin Rabbani, on 25 Feb 2011 at the website Jadaliyya, via a link from from the Blog The Arabist

The abiding weakness if not absence of Libyan institutions to mediate conflicts and prevent new divisions from turning violent of course also means it can all go horribly wrong. Nevertheless, there are reasonable causes for optimism. The first is the extraordinary collective spirit, voluntarism, creativity, and unity of purpose unleashed by the uprising. A second is the likelihood that enough Libyans will reflect on their miserable fate during the past several decades and insist upon – and act to ensure the application of – iron-clad guarantees that they won’t be subjected to another lifetime of tyranny. Third, the regime’s desperate attempts to manipulate tribal and regional differences in order to sow division appear to have failed, despite a previous record of relative success. Last but by no means least, the entire Arab world is watching – and participating. Just as Qaddafi is unable to escape being held to account by his own people, so Libya will be held, and appears keenly aware it will be held, to the new standard of Arabism – including dignified governance – that is being forged across the region. Just as Egyptians began walking like giants after simultaneously shedding themselves of Mubarak and the stereotype of docility, so Libyans appear equally keen to walk with their heads high after years of being maligned by fellow Arabs on account of Qaddafi’s antics.

On the other side of the ledger Libya is and will remain a rentier state, and such entities have a tradition of producing absolutism and the means to keep their populations quiescent. But that is precisely why the Libyan case is of such significance. It is not Syria or Morocco, but rather the “Kuwait” of the Maghreb. More to the point, and despite its huge resources and small population, socio-economic discontent appears to have played a prominent role alongside political fury in unleashing the uprising. True, Libya is not a Gulf state and unlike the latter proved incapable of resisting the winds of change during an earlier revolutionary period. But Bahrain is already on fire, and the implication is that the prospects for upheaval in some of the latter’s neighbours – particularly Kuwait and Saudi Arabia – is more than wishful thinking. Why, indeed, do the potentates of such islands of eternal stability feel suddenly obliged to gift their subjects billions if they are immune to the Tunisian virus that has become an Arab disease?

Another noteworthy aspect of the Libyan experience is the significant role the diaspora has played in demolishing regime legitimacy. Reminiscent of the role played by Iranian students in the 1970s, and exceeding the previous efforts of overseas Tunisians and Egyptians, it has in this case been Libyan diplomats who have taken the lead. By vociferously deserting the regime they represent in droves, they have sent an unambiguous message to their compatriots that the ship is sinking and thereby encouraged others to turn against Qaddafi. Given the sheer magnitude of Arab diasporas – itself an indication of the staggering scale of misrule – and the visible impact of Libyans abroad, diasporas are likely to respond more energetically in future.
And for the oil futures crowd - or anyone who relies upon fossil fuels, Oil Declines Most in a Week on Arab League’s Libya Crisis Resolution Plan, By Grant Smith and Christian Schmollinger - Mar 3, 2011 6:38 AM MT, at Bloomberg

Crude dropped the most in a week after the Arab League said it’s weighing an offer by Venezuela’s Hugo Chavez to intervene in Libya’s civil conflict. Muammar Qaddafi’s warplanes bombed rebels yesterday as his troops fought unsuccessfully for a major oil port, and opposition leaders appealed for foreign nations to launch air strikes. Prices may be starting to hurt global economic growth, said Adam Sieminski, chief energy economist at Deutsche Bank AG.
Crude for April delivery slid as much as $1.86, the biggest decline since Feb. 24, to $100.37 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.19 at 1:34 p.m. in London. Yesterday it settled yesterday at $102.23, the highest since Sept. 26, 2008.

Brent crude for April settlement fell as much as $3.26, or 2.8 percent, to $113.09 a barrel on the London-based ICE Futures Europe exchange, the biggest decline since Nov. 12.
Libyan oil production may not return to recent levels if Qaddafi is overthrown, following a trend set by fellow OPEC members Iran and Venezuela when their own governments last changed, according to a Baker Institute analyst.

“You could see, in the case of Qaddafi being overthrown, particularly if it’s violent, prolonged diminished capacity from Libya,” said Ken Medlock, an energy fellow at the James A. Baker III Institute for Public Policy at Rice University in Houston, in a telephone interview. “Regime change, even if it’s good for democratic movements, it’s generally not good for technical industries.”
From the Financial Times Blog Alphaville, Why you really can’t swap Libyan crude easily, at all, Posted by Joseph Cotterill on Mar 02 14:07.

We’d note the mention of Nigeria, of course, because its light sweet grades have been among those most favoured as immediate Libyan replacements, and might play an important part in any Saudi bid to support markets later on.