- Libya has seen its oil production slashed by 75% in just one week as warring factions within the country attempt to use the key commodity to seize control.
Libya has seen its oil production slashed by 75% in just one week as warring factions within the country attempt to use the key commodity to seize control.
Output from Africa's third-largest oil producer has plummeted from around 1.2 million barrels per day (bpd) to just over 320,000 bpd, its state oil company said — an estimated loss of $256 million in revenue.
That's thanks to pipeline closures and blockades of export terminals last week by rebel groups under the command of rogue general Khalifa Haftar, whose militias are battling the U.N.-recognized Government of National Accord (GNA) in Tripoli to take control of the Libyan capital. Fighting in Libya resurged over the weekend, torching a cease-fire brokered by Russia and Turkey in early January.
The move is a power play for Haftar, the charismatic leader whose fleet of Libyan militia groups, collectively known as the Libyan National Army (LNA), launched an assault on Tripoli last April that's taken thousands of lives and displaced more than 140,000 people. The rabidly anti-Islamist Haftar is seen as the strongest power player within Libya — whose nearly decade-long conflict now involves several international powers — and his militias control the country's east and much of its south. The east is home to the lion's share of Libya's oil facilities.
The output drop in the OPEC state sent the price of Brent crude spiking last week and could be devastating for the Libyan economy. But regional analysts are calling it a quick leverage grab and questioning how long it will last, while noting that ample global crude supply and fears over China's coronavirus are keeping a heavy lid on oil prices.
The 76-year-old commander, who is credited with a major role in defeating Islamic State militants in 2016 alongside U.S. airstrikes, also happens to be an American passport holder. A rival of longtime Libyan dictator Moammar Gadhafi, Haftar lived in the Virginia suburbs for several years while working as a CIA asset to plot against the former leader. After the Arab Spring, he apparently spent several years back in Virginia to "enjoy his grandchildren," he told the New Yorker Magazine in a 2015 interview.
So Haftar poses a massive headache for the U.S. A former ally, they can't exactly sideline him; but his violent assault for power stands in the way of a democratic Libya that Washington had hoped for after its NATO intervention helped topple Gadhafi in 2011 during the Arab Spring.
Nine years after a U.S.-led coalition toppled Gadhafi, Libya remains a fractured state, ravaged by civil war and terrorism. And a vast array of competing foreign interests have entered the Libyan arena, including Turkey, Russia, Qatar, France, Italy, the United Arab Emirates and Egypt. The lack of stability and outside influence has led some to call it the new Syria.
Russia has deployed a few hundred mercenaries from the paramilitary Wagner Group and others into the country to back up Haftar, while Turkey has sent in a few hundred military advisors to support the GNA. The UAE is carrying out airstrikes in Libya, also to help Haftar.
"We want to avoid Libya becoming the scene of proxy wars," German Foreign Minister Heiko Maas said in early January. "Libya cannot become a second Syria and so we need rapidly to enter a political process, an agreement on an effective cease-fire and an arms embargo."
The major players don't seem to be listening. Haftar is now directing renewed fighting in Libya's west after a German-brokered conference in Berlin last week ended with external nations calling for a cease-fire and pledging to end their interference in the war-torn country of 6.4 million. The meeting concluded with Hafter storming out before making any agreements, and Haftar and GNA Prime Minister Fayez al-Serraj refused to be in the same room.
With fresh violence and foreign fighters spilling into the country in the last week alone, the pledges of non-involvement appear to be falling apart.
Libya has become a near free-for-all for competing international powers: myriad countries are backing the disparate groups fighting on the ground to further their own ideological and financial interests.
Turkey, and to a lesser extent Qatar and Italy, support the U.N.-backed GNA — to the extent that Turkey earlier this month began deploying its own advisory troops to the country at Tripoli's request. Turkish President Recep Tayyip Erdogan has also flown some 2,000 mercenary fighters into Libya from the Syrian conflict, which are known to include radical Islamists, to combat Haftar's forces. Turkey's support, analysts say, is tied to Ankara's desire for access to Eastern Mediterranean gas drilling.
"Because Berlin didn't manage to declare a ceasefire or deliver any substantive result, what seems to be happening is Erdogan has every intention to increase that number (of mercenaries) to way beyond 2,000," Jalel Harchaoui, a Libya expert at The Netherlands Institute of International Relations, told CNBC via phone.
Meanwhile the United Arab Emirates, Egypt, France and more recently Russia back Haftar. The UAE and Egypt oppose the GNA — which they see as a hotbed of Islamism and Muslim Brotherhood affiliates, something that's anathema to their own governments — and have sent weapons and special forces troops to support Haftar's fighters. Experts name the UAE as the most powerful foreign player in the country. In early 2017, Russian mercenaries began appearing in Libya to support Haftar as well, mostly in logistical, support and intelligence roles.
For Russia, the move is viewed as a continuation of Moscow's expansion and leverage over diplomatic channels in the Middle East and Africa.
"Libya was always looked at (by Moscow) as the perfect passageway to Africa," Harchaoui said. "Russia is interested in any mechanism that allows it to undermine NATO and promote disunity within European bloc… Libya is perfect."
The UAE in recent years has violated U.S. arms embargoes, delivering planeloads of weapons to Haftar's fighters. But with increasingly close relations between Abu Dhabi and the Trump administration, Washington has so far declined to openly rebuke the Emiratis. The UAE foreign ministry did not reply to a CNBC request for comment.
Over the weekend, the U.N. mission to Libya rebuked the "continued blatant violations" of an arms embargo by countries present at the Berlin peace talks.
Representatives from all parties are expected to meet in Geneva for further talks, though the date is undecided and regional experts have little faith in the situation improving.
So far, peace talk efforts "haven't translated into anything at all," Harchaoui said, stressing the fact that more than 2.2 million civilians are currently living under assault.
For the myriad foreign actors in Libya, "you think that the war should continue because your preferred actor hasn't won yet," Harchaoui said. "And you continue believing in the benefits of brutality, that if the other side is escalating, then you should escalate too, and you should get it done."