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A man pumps gas at Petro-Canada station in TorontoMARK BLINCH

Anyone looking for evidence that Libyan leader Moammar Gadhafi's hold on power is rapidly slipping need only consult my exclusive Stages of Autocratic Departures, or SAD, which he has gone through at lightning speed.

The first stage is complete denial that there's any problem. The second stage is a half-hearted promise of modest reforms that only enrages the demonstrating crowds. The third stage involves a bloody crackdown, often excluding normal military or police channels and relying heavily on hired thugs. The fourth stage seems under way now in Libya: A combative leader vows to fight to the bitter end to preserve his regime, and says he will never leave ... for the sake of the country, of course. Why, without their selfless devotion to the national good, the inevitable outcome would be chaos.

It's about this point that the servants get the travel luggage ready, and the rest of us start worrying about oil .

During any turmoil in the Middle East or North Africa, it's only logical for people to fret about oil supplies, deliveries and prices. A shutdown of the Suez Canal during the Egyptian crisis, for example, would not have been a trivial matter.

And Libya is no Egypt. This is an OPEC member and a major supplier of crude oil to big European consumers. Italy alone takes close to 30 per cent of Libya's output, totalling about one-quarter of its requirements. France accounts for another 14 per cent; Germany 11 per cent and Spain 10 per cent. China is also a big buyer.

Supply disruptions appear certain, as Libya descends into lawlessness - not because Mr. Gadhafi or his opponents plan to turn off the taps (both sides need the money) but because of an acute shortage of skilled workers to keep them open, now that foreign technicians are departing in droves.

But even a complete shutdown of Libyan crude production would not result in shortages anywhere but perhaps in Italy and to a much lesser extent France and Spain. Natural gas shipments to Italy via pipeline (amounting to 15 per cent of Italian demand) have already been curtailed.

Saudi Arabia and other big exporters have been holding back oil at a time of excess supply. The U.S. energy department estimates excess capacity amounts to between 4 and 5 million barrels a day. Libya's entire normal daily output is about 1.8 million barrels daily.

Yet even without oil shortages, prices will remain under considerable pressure, because companies sitting on comfortable inventories will be less willing to dip into them if they have any worries about their next deliveries. And others will be frantically buying more oil on the open market in what economists label "precautionary demand for inventories."

Simply put, if conditions don't stabilize soon, prices will run higher - perhaps a lot higher - regardless of actual market conditions.