By Rauf Mammadov* and Theodore Karasik** – 10 April 2019: Libya’s civil war intensified this month after General Khalifa Haftar, head of the Libyan National Army (LNA), which is allied with the eastern government based in Tobruk—the House of Representatives (HoR)—launched an offensive to topple the Government of National Accord (GNA) in Tripoli. Indeed, Libya’s crisis is heating up again with surging violence. Thus far, dozens have died, hundreds have suffered injuries, and thousands have fled Tripoli since “Operation to Liberate Tripoli” began earlier this month.
Unquestionably, Haftar’s plans for “liberating” Tripoli rely heavily on strong support from foreign states, chiefly Egypt, France, the Kingdom of Saudi Arabia, and the United Arab Emirates (UAE), which are involved in the North African country’s civil war due to their own geopolitical interests in Libya. One of these states’ major objectives in Libya is to see to it that the LNA/HoR takes control of Libya as a whole, including all the country’s oil reserves. In as much as ideological issues and interests in countering Libyan Islamists’ influence in the country’s political landscape drive Abu Dhabi, Cairo, and Riyadh to back Haftar, it is hardly surprising that energy geopolitical variables shape these other Arab states’ agendas in the most oil-rich country in Africa.
“Operation to Liberate Tripoli” was not Haftar’s first offensive this year. In February, the eastern commander’s forces took control of Libya’s Fezzan region. Consequently, the LNA’s control expanded over roughly 90 percent of the country’s oil and gas assets (oil and gas fields, refineries, terminals, etc.).
The Al-Sharara and Al-Feel (Elephant) oil fields are located in the Fezzan. These oil fields are operated by Spanish Repsol and run by ENI in partnership with Libyan NOC, Gazprom, and Daewoo. Al-Sharara is Libya’s largest producing oil field, and together with Al-Feel, produced almost half of Libya’s 1.1 million barrel per day production average in April. Most of Libya’s crude exports in March were sold to European buyers. Libya also supplies natural gas (4.3 billion cubic meters) to Europe via the Greenstream pipeline to Sicily, Italy.
Notwithstanding all the violence and chaos that has been shaking Libya in recent days, weeks, and months, Haftar’s attacks—both in the Fezzan and on Tripoli—have not caused any halt in Libyan oil exports. This is mainly attributable to the National Oil Corporation (NOC) of Libya.
During the current spasms of violence, the NOC chairman remained loyal to his traditional constructive narrative by calling conflicting sides to restrain from inflicting damage to vital oil and gas infrastructure of the country. On April 9, a UK-Flag Suezmax tanker, Energy Triumph, departed from Mellitah, 100-km west of Tripoli, carrying a million barrels of crude oil to China. ENI, which also operated Mellitah Oil and Gas Company, announced the withdrawal of its Italian national staff from Al-Wafa and Al-Feel oilfields (controlled by Haftar), and Tripoli.
Haftar’s offensive came 28 days before the U.S. Treasury’s Iranian crude import waivers to nine countries expire, and one month after OPEC’s (Russia + OPEC) Baku meeting (March 17-18), where the Saudi/Russian-led cartel decided to maintain the current production rates. Although the Trump administration is yet to make its mind on whether to extend the waivers or not, any force-majeure interruptions from one of the largest crude exporters could cause serious predicaments for both the US Treasury and OPEC. On April 5, oil prices did top $70 for the first time this year following the news on unrest in Libya, coupled with economic troubles of Venezuela, as well as, with Trump’s Director of the National Economic Council Larry Kudlow remarking on the progress made in US-China trade deal negotiations. But, the prices started to slip the next day with traditional pre-OPEC meeting statements by Russian officials on reluctance to continue with production cuts coupled with uninterrupted production in Libya despite the ongoing military conflict.
Although Haftar held control over the most important oil and gas infrastructure in the country, he was deprived of access to revenues from the exports of hydrocarbons. His attempts to establish his own NOC and to sell oil from Eastern provinces (mainly, from Sirte basin) were rebuffed by the UN’s resolution which stipulates that all “oil facilities, production and exports must remain under the exclusive control of (the Tripoli-based) NOC and the sole oversight of the Government of National Accord”. Last year, both the UAE and France (with Paris looking the other way) pushed Haftar to find a way to export oil out of the East while implementing an oil blockage to garner control over the Libyan Central Bank. The attempt failed. Thus, the status quo was not acceptable to Haftar despite the many battles for management over the Sirte Basin energy assets. By attacking Tripoli, Haftar aims to, in the most successful scenario, gain the ultimate control over Libyan oil revenues, or to broker a better deal to obtain more power in decision-making.
* Rauf Mammadov (@RaufNMammadov) is a resident scholar on energy policy at the Middle East Institute (MEI) and a senior fellow at Gulf State Analytics (@GulfStateAnalyt). He focuses on issues of energy security and global energy industry trends, as well as energy relations between the Middle East, Central Asia, and South Caucasus. He has a particular emphasis on the post-Soviet countries of Eurasia. Prior to joining MEI, Mammadov held top administrative positions for the State Oil Company of Azerbaijan Republic (SOCAR) from 2006 until 2016. In 2012, he founded and managed the United States Representative Office of SOCAR in Washington, DC.
** Theodore Karasik (@TKarasik) is a senior advisor to Gulf State Analytics and an adjunct senior fellow at the Lexington Institute. For the past 30 years, Karasik worked for a number of US agencies examining religious-political issues across the Middle East, North Africa and Eurasia, including the evolution of violent extremism and its financing. He lived in the United Arab Emirates from 2006 until 2016 where he worked on Gulf Cooperation Council (GCC) foreign policy and security issues surrounding cultural awareness, cybersecurity, maritime security, counter-piracy, counterterrorism, and infrastructure and national resilience. GCC relations with Russia and implications for the Arabian Peninsula states were also under Karasik’s mandate.
