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The Battle for Libyan Oil: Haftar’s Quest for Power and the Impact on Global Markets

In early July, Libyan General Khalifa Haftar appeared at a military rally held by his force commanders. Through the force, which controls much of the country’s eastern territory, in 2019 he failed to resolve the battle to overthrow Tripoli with military brutality, leading to his great disappointment, as well as the force. This was something Haftar hadn’t expected, and he was forced to accept a peaceful solution, albeit an apparent one, after the sudden turn of events. Although this defeat has affected the development of the situation in Libya, Haftar is still the focus of all attention. Despite the holes in his uniform, he remains a major political figure and wields extraordinary influence across much of Libya.

Haftar has not given up on his dream of one day becoming the sole ruler of Libya after Gaddafi. Lately, he seems almost confident that the element of power is once again within his grasp, or within reach. In his most recent speech, he began by attacking Richard Noland, the US envoy to Libya and Washington’s ambassador, before announcing a deadline for rewriting the distribution of oil wealth, which expires in two months at the end of August. He then began a military campaign targeting oil ports and wells, as well as the headquarters of the internationally recognized government of Abdul Hamid Debayba. The government gets an estimated 91 percent of oil revenues, about $22 billion last year, and a fraction of that wealth, 7 percent, goes to the east and 2 percent to the south, both of which go to the east. Both regions are under Haftar’s control and own 90 percent of the country’s oil and gas fields as well as most of its fuel export facilities and ports.

Understanding the importance of Libyan oil in global markets (Al Jazeera)

The huge gap in the distribution of oil revenue has plunged all parties into deep-seated problems that are difficult to resolve through domestic and foreign negotiations. At present, no regional or international force has been able to successfully reach a plan to prevent the damage to the “oil card”. The global oil market will be affected. The reason is that Libyan oil is pumping an average of 1.2 million barrels per day, much of it going to European customers looking for alternatives to the missing Russian crude. At the same time, competition among several countries to secure domestic energy market contracts. This means that this conflict is close to turning into a proxy war, and oil has always affected everyone’s policy on Libya. This was evident, for example, when Western countries abandoned Gaddafi himself after Gaddafi lost control of oil wells in 2011.

oil and political movements

On June 4, Italian Prime Minister Giorgia Meloni received Libya’s eastern force commander Khalifa Haftar. This visit was not a clear indication of Rome’s preference for this eastern Libyan, but an effort and attempt to safeguard Italy’s interests in its ancient colony. In particular, Meloni himself was the first to visit Tripoli in January, when the Italian prime minister signed an $8 billion deal with the Al-Dabaibah government to develop two offshore gas fields by the Italian company Eni.

On January 28, 2023, Italian Prime Minister Giorgia Meloni and the Dabaiba government signed a gas agreement worth US$8 billion to develop two offshore gas fields (Anadolu news agency)

The agreement aims to increase energy supplies from the Italian gateway to Europe. As a result of the Ukraine war, continental Europe has weaned itself off its dependence on Russian oil and gas, while at the same time starting to buy U.S. gas at premium prices. The Europeans found themselves engaged in this war against a more greedy businessman than their Russian enemy. And Washington is desperate to keep raising prices, prompting France, facing a fuel crisis, to declare it can no longer pay double the price for gas. This is not a standard of friendship, because it is a clear betrayal of the United States.

When Italy approached Haftar, it realized that its agreement with Dabaiba’s government was not enough to safeguard its interests. On top of that, under the Libyan Political Agreement, the government formally has no right to unilaterally conclude agreements and treaties without the approval of the Tobruk parliament in the east. Nor can Rome guarantee the passage of its interests without an agreement with Haftar, who can block any action taken without an agreement with him. In particular, he has most of the country’s oil and gas fields in his hands, as well as most of the fuel export facilities and ports. Moreover, Meloni himself is aware of the extent of the need for Haftar in other documents, most importantly the issue of irregular migration from Libya to Italy, which is trying to impose a naval blockade on the Libyan coast to stop migrant boats, which It was a promise made by the prime minister during his political campaign during his tenure.

Not far from Libya, Rome turned to Algeria for the same reason. Algeria will become Italy’s largest natural gas supplier with a 40% advantage in 2022, filling the gap previously filled by Russia. The Italian government, which is in urgent need of natural gas, realizes that with the prolongation of the war, the situation has entered a dangerous stage. And delaying a new deal will have consequences that may be unavoidable, so Rome moved to double gas supplies to Azerbaijan and signed a $4 billion deal with Algeria to boost gas supplies, and Italy isn’t alone countries participating in this competition. While France is less affected by Russia’s gas embargo from Europe, as Norway supplies most of its needs, it is also headed to Africa. It made concessions to Algeria in obtaining entry visas in exchange for gas supply contracts before signing a cooperation agreement with the UAE in the energy sector.

All of this is happening against the backdrop of a wider European pilgrimage to oil and gas rich countries such as the US, Norway, Qatar, UAE, Libya and Algeria to compensate Russia for 40% of its gas and 30% of its gas flows to the Old Continent oil. However, other secret calculations differentiated competition between Italy and France, especially for North African gas resources. Italy’s ambition to make Rome a North African gas center clashes with French plans. Troubled Paris is that it sees Meloni’s move as not limited to trying to secure energy imports and will not interfere with arrangements previously carefully prepared under an ambitious plan by the ruling right that seeks to revive Italy’s strategy after years of decline in North Africa status. And the real start of the conflict was in Libya, a coveted arena of wealth for Italians, French, Americans and even Russians.

oil is the fuel of chaos

In one decisive moment, Khalifa Haftar held Musa’s stick and in 2013 took control of the Libyan Oil Crescent region, which contains about 80% of Libya’s oil reserves. half of the country’s exports (Reuters)

The untold story begins with the fall of Gaddafi’s regime during the Libyan revolution that broke out in February 2011. At the time, the struggle for control of oil was the missing piece in the protests that rocked many European capitals, especially those industrialized nations that depended on a share of Libya’s oil output, which at the time was estimated to be around 1.65 million barrels a day. Therefore, after the enlarged meeting of European energy ministers, it was decided that NATO’s military intervention to overthrow the regime was inevitable. And the first thing these forces do after they arrive is to expand the scope of their operations to include oil fields and oil ports as particularly important strategic facilities.

After Gaddafi’s death in October 2011, the last day of his Libyan biography came to an end, with relative reassurance in the West that its interests in Libya were under control. However, Libya at the time was witnessing a new chapter in the power struggle between the clans that held the spoils of Gaddafi’s arsenal. But a man in the east knew all too well that he was on his way to leadership and power, albeit as a retired general at the time, lacking military clout and political cachet, combined with a contentious history of defeat and flight under previous regimes. In one decisive moment, Khalifa Haftar held Musa’s stick and in 2013 took control of the Libyan Oil Crescent region, which contains about 80% of Libya’s oil reserves. half of our exports, while keeping the world alive and hopeful.

Haftar’s major victory in this narrow and wealthy region of Libya required a highly complex political path. The general then doubled down on his newfound clout through the umbrella of regional and international allies who see their interests assured in his political programs, whether from the great powers dominating the international system or influencing the Middle East Far-reaching regional powers. However, although Haftar was given the green light, these forces did not allow him to sell the oil he independently controlled, but instead forced him to acquiesce and hand over the management of these strategic installations to the internationally recognized Tripoli government’s national oil company, while Force him to make concessions and prevent him from creating a parallel entity to the agency in the east to safeguard the interests of major countries in their share of Libyan oil.

Fluctuations in military control of Libya’s oil crescent (Al Jazeera)

Despite Haftar’s strong power on the ground, taking all of Libya’s oil resources out of his control makes his authority incomplete, so his political future is insecure unless Tripoli is included. In 2014, he launched the Karama campaign under the pretext of “anti-terrorism”, the main purpose of which was to impose military authority over large parts of Libya’s eastern, southern and central lands, and to prepare for another battle to be launched later in 2019. , Advance to the capital Tripoli, so that all of Libya’s oil resources and huge revenues are at his disposal, including the central bank and the national oil company. So far, Haftar has accomplished the goal he has been striving for for many years. However, Turkey stepped in to help the then Sarraj government, completely destroying his political and military calculations and letting him go away empty-handed.

Having lost hope of capturing Tripoli, the Libyan general retained only military control of the ground, prompting him to insist on a long-term blockade of oil installations and ports, forcing the United States to press Western rivals to keep oil and gas revenues in Libya’s three regions ( Cyrenaica, Tripolitania and Fezzan), thus guaranteeing him a steady stream of liquidity to finance his army and complete his stalled political projects.

Internal chaos and external competition

As the Tripoli government continued to refuse to distribute oil revenues in the way Haftar demanded, between 2017 and 2019 the general turned to Russia to print an additional $11 billion in Libyan dinars, which were injected into Benghazi’s parallel bank. He then implemented a blockade of oil ports in 2020, but failed to force the West to bow to his demands for a special account in one of the countries where oil revenues are deposited and a new revenue distribution mechanism. In this way, the general succeeded in nationalizing the funds needed to finance his wars and to complete his political program, which he was unable to carry out by force.

This helps to corroborate Haftar’s claim that the Tobruk parliament itself had previously threatened to impose a blockade on oil exports within its territory due to the misuse of energy revenues by the Tripoli government, which he accused of wasting billions of dollars without providing real services. And in June, a parallel government appointed by the Libyan House of Representatives in Tobruk, led by Osama Hamad, threatened to resort to the judiciary to stop oil exports in line with the principle of “fair distribution of wealth” in the constitutional declaration. That’s what prompted Haftar to come forward later in a final threatening speech. This person was relying on official statements from the Tripoli government and the central bank, which stated that the western region received 91% of oil revenues from the budget in 2022, about $22 billion, but did not really benefit.

The domestic flare-up comes as Libya is seeking to open its doors to foreign investment in the energy sector. The first is Turkey, which in late 2022 signed an agreement to explore for oil and gas in Libyan waters under an earlier agreement between the two countries to delineate the maritime border. The agreement angered several European countries. These countries are scrambling to get a piece of the Libyan oil pie, and NOC is inviting foreign companies back home to resume work in the exploration and production sector as things gradually improve, but that doesn’t mean raising output to 1.2 million barrels a day and plans to reach 2 million barrels.

The political situation in the country is relatively stable despite the inability to agree on a deadline for holding elections and severe polarization due to the construction of one dam after another. Against this backdrop, international organizations such as Fitch Solutions project that Libya’s real GDP will grow by 19.7% in 2023 after contracting by 12.9% in 2022. However, these growth prospects appear to be disrupted by internal dislocation and external competition, and oil exports may also be affected by these disruptions.

rope game

Libya, which has Africa’s second-largest reserves at 48 billion barrels, according to OPEC, has a population of just under 7 million, according to the International Monetary Fund, making it one of the continent’s highest per capita ratios (AP)

Libya has the second-largest reserves in Africa at 48 billion barrels, according to OPEC, and has a population of just under 7 million, according to the International Monetary Fund, which puts its per capita ratio among the highest on the continent and makes the country It has become a restaurant in many countries including Italy and France. Today, Rome is one of the most craving Libyan cakes. In 2014, Paris was Libya’s second-biggest customer, but according to the Libyan Chamber of Commerce, Paris is now 16th on the list of Libya’s partners, while Rome has been promoted to Tripoli’s first trading partner in the past year.

A closer look at the actual situation, starting with Italy’s Eni’s acquisition of 80% of Libya’s oil investments, provides a clearer picture of the conflict and its parameters. The remaining percentage is shared among several U.S., French, Algerian, Russian and Indian companies, the largest of which is France’s Total, which buys 84,000 bpd of the 1.2 million bpd it produces. That means Italy will be the country hardest hit by the devastating shutdown if the parties fail to reach a solution on splitting oil revenues. Meanwhile, the unrest has a direct impact on the Meloni government, which needs stability in Libya to protect its oil projects and control the flow of irregular migrants. According to statistics from the United Nations Refugee Agency in 2023, about 87,000 migrants have arrived in Italy from the Libyan coast.

The fact that most oil wells are under the control of Khalifa Haftar paints a picture of European operations. Because his warning comes as the West abandons Russian oil derivatives over the Ukraine war, which is one reason why no sanctions have been imposed on him despite his open reliance on Wagner mercenaries. Haftar’s value to Europe is thus that a conflict with him endangers the energy security of Italy and the rest of Europe and portends a rise in irregular migration. Meanwhile, Russia has joined the main players on the Libyan stage and is trying to gain a foothold in the warm waters of the Mediterranean by finding a foothold in the port of Benghazi, which is similar to the Syrian port of Tartus. He called on the West to adopt a pragmatic policy of retaining Haftar as the main party in the conflict, as a deal with him is a must for any imminent political settlement.

From this perspective, European pragmatism in the Libyan conflict depends on using everyone’s rope. Despite the cold relationship between Libyan generals, the United States and France, and despite the UN’s recognition of the legitimacy of the government in Tripoli, Western interests constitute an obstacle to breaking Haftar’s power in Libya, which Haftar still has in Libya’s war and political decision-making. Influence, the most important of which is the most important card in the Libyan game, namely ports and oil wells. It threatens a resurgence of fighting in a country still groping in turmoil 12 years after Gaddafi’s ouster.

#oil #war #secret #war #international #powers #Libya
2023-09-03 06:02:49

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