No matter who eventually wins the lethal battles raging in Libya, the oil market will likely be starved of hundreds of millions of barrels for a long time, reshaping oil flows from west to east.
Top quality Nigerian and Caspian crude grades have shot to multi-year highs and huge premiums to Middle Eastern grades, wrecking buying opportunities for emerging Asian economies.
More of this oil will likely head to Europe's refiners who do not need to pay up the long-haul voyage on top of the Libyan war premium, unless they decide it is simply too expensive to run refineries.
The political unrest in Libya has so far cost the OPEC producer 1 million barrels of crude oil output per day -- over half its daily output -- and exports are paralysed due to a lack of staff, sanctions and banks' refusal to fund deals.
Industry estimates for how much and for how long Libyan oil will be missed from the market vary. But the consensus is much of the oil will disappear for the rest of 2011 as the unrest shows signs of developing into a protracted battle which has already damaged some terminal and pipeline infrastructure.
This would mean a loss of nearly 300 million barrels of oil.
"It looks like the country is heading into a full-blown civil war," said Samuel Ciszuk, senior Middle East and North Africa energy analyst with IHS Energy.
"There will be no quick solution. So the market will have to get used to Libyan oil off stream for the most of this year or even the rest of the year."
The chief executive of Italian oil firm ENI Paolo Scaroni told the FT it might take between 6 months to a year for Libyan operations to return to normal.
Bank of America-Merrill Lynch estimates the average 1.4 million barrels per day of Libyan oil will be off the market for more than a year.
Analysts are weighing the prospect of a sustained period of zero production if more upstream infrastructure is damaged.
"Will the shut-in volumes go higher? The answer is 'yes'," Societe Generale's oil analyst Mike Wittner said.
"It is a question of time whether oil facilities are getting targeted. And if it happens it will take months to repair damaged facilities. If the violence spread into oilfields, repair work to upstream facility even takes longer than downstream."
Libyan leader Muammar Gaddafi launched a sea and tank assault on the oil port of Ras Lanuf this week, intensifying a counter-offensive against the out-gunned insurgents.
Long-term disruptions of Libya's crude oil exports are likely to push up spot premiums on low sulphur crude oil from West Africa and the Caspian region further.
This could potentially squeeze spot flows of high quality crude to Asia for the long term.
Spot premiums on benchmark Nigerian Qua Iboe jumped to a 2-1/2 year high of $4 a barrel to benchmark North Sea Brent this week.
The jump in differentials comes on top of the rise in the benchmark Brent prices to a near 7-year high above Middle East/Asia sour benchmark Dubai crude.
"You are likely to see Brent remain firm relative to Dubai, limiting the possibility of spot arbitrage of light crude eastwards," said Harry Tchilinguirian, BNP Paribas' head of commodity markets strategy.
Top exporter Saudi Arabia has promised it will provide more oil to make up for lost Libyan barrels and additional supplies could come to the market if OPEC decides to raise production.
But analysts say these barrels will go east not west.
Saudi Arabia's largest oil customer base is in Asia and it only sells oil to term customers.
"Of the additional barrels coming from OPEC, I would see most of those volumes going to Asia, which will free up some West African that normally go to Asia, because Europeans are looking for lighter grades," said Alex Poegl, analyst at JBC Energy, referring to the fact that some European refiners in the Mediterranean cannot process sour grades.
Asian refineries tend to have more flexibility to convert poorer quality crudes into high-value fuels like gasoline.
Still, traders added that booming demand in Asia means that flows of West African grades will not halt completely.
"I think some baseload barrels will still go to Asia but fewer marginal barrels will go," said a crude oil trader for the West African market.
Overall, Asia typically buys between 1.5 million to 2 million barrels per day of West African crude oil.