The battle for Libyan oil

The Libyan conflict continues unabated eight years after Gaddafi’s ouster. We look at the cause, major players and the reasons behind the ongoing humanitarian crisis.

STEVE AUSTIN | 2019/06/10

Not long ago, we heard of Libya’s long drawn path to freedom. Remember Gaddafi and the civilian uprising in the country? The Arab spring, as it swept Libya unsparing the authoritarian Gaddafi regime, promised to have ushered in a new beginning. But eight years on, how is Libya?

Well, the country is mercilessly split between East and West with sprouts of new conflicts every day. You may ask, why? Greed for power, you know. For starters, Libya sits on the largest oil reserve in the entire continent of Africa. Before the revolt, Libya was the third largest oil producer in the continent with 1.6 million barrels per day as output. At present, the figures mark at about 1.1 million barrels a day. Libya is a significant oil supplier to Europe too. Today various rivals are intensely fighting for oil control in Libya. This is important enough to propel oil prices to $74 in international markets.

As the backbone of its economy, oil has been at the core of unrest that followed Gaddafi’s overthrow, a slow-burn conflict with periodic flare-ups of intense fighting. Unbeknownst to most, unlike other recent conflicts in the region, this one is not based on ideology or religion: it is purely about controlling Libyan oil.

Needless to say, any conflict in Libya will shakeup the oil prices. As such, we’ll look at the players, their backers and who stands to benefit.

Gaddafi’s Libya

Hailing from tribal Bedouin origins, Muammar Gaddafi ascended to power in a military coup of 1969. As with many despots, Col. Gaddafi’s rule started well enough. Much of the oil resources in Libya, during those times, were controlled by multinational oil companies. Naturally, the profits also went to those companies. Gaddafi, issuing ultimatums to those companies, succeeded in renegotiating contracts paving the way for Libya to glean revenue from its oil. So much so, with the nationalization of oil, Libya matched other Arab states in oil production. This far, so good. But aren’t we talking of Gaddafi? Whenever he went abroad, he stayed in tents to, you know, show that he was still a humble man at heart. Was he? Far from it.

Gradually, Gaddafi became an absolute dictator snubbing civil liberties, enacting despotic laws, funding terrorism in other countries and ruling Libya with a firm hand. In this respect, he was no different from the autocratic monarchs he once prophesied to despise. For decades, he was the absolute ruler of Libya. Till 2011, he remained undisputed.

That begs the question, what kept him on for so long? Luck, providence or strategic maneuvering? Well, the truth is, Gaddafi was in power for so long because western powers backed him in exchange for securing oil. Ply him with expensive gifts and Gaddafi returned the gesture with oil contracts. So what happened? Well, the need for change arose with his increasingly unpredictable behavior. Had he been a mad man clinging to power by killing whoever opposed him or denying citizens even basic human rights, the world wouldn’t have bated an eye. However, this mad man had a nation rich in oil. Of course, it had to be raided and plundered. We all know the story of his overthrow by a rag tag army of idealists (fanatics really) backed by the mighty NATO.

Curiously, as soon as Gaddafi issued threats to blow up his pipelines, the oil ports fell to the rebels. Crude oil secured, the battle ensued at its own pace. Ultimately, Gaddafi met his end while being curled up in a sewer like some nocturnal pest.

While running the county, Gaddafi, like all despots, also amassed quite a fortune thanks to fronting shell companies, investing in properties around the world apart from the revenue from oil. Just before his capture he had sold about a fifth of Libya’s gold reserves in desperation. You may wonder what happened to all that money. Even a percent of which, if turned up, could have led Libya to prosperity, inevitably. Well, his billions have simply disappeared. Some of his assets, held in France, Italy, Germany and the United States show no sign of benefitting Libya. In this side story, China lost billions of dollars it had invested in Libya. (So did Russia as these two found themselves unassailably on the losing side.) One of those rare times when China lost something in this century!

After eight years

Eight years on, how are things different in Libya? Has democracy taken root fast tracking Libyan people to prosperity? Well, after the civil war, elections did take place for the first parliament way back in 2012. Admirable in itself as Libya was, by then, deeply divided in terms of region, armed groups, tribes and religious sects.

Further, the fringe militias were fighting among themselves for supremacy. A General National Congress Government was elected after the elections, nevertheless. In the same year, in mad house come to party, militias started organizing sharp well-planned attacks against Sufi mosques, police stations and heritage sites in the country. The American embassy wasn’t spared with the Ambassador killed. Libyan Prime Minister A.G. Abushagur was shown the door and a new Prime Minister, Ali Zeidan was sworn in. He too, soon enough, went down to another premier, Abdullah al-Thani. Amidst violence, elections were held for the Council of Deputies in 2014. The GNC, however, refused to cede power to the Council of Deputies forcing the new parliament to Tobruk.

Since then it’s been the old tale of widespread and repeated conflicts with the militias, jihadists, and other extremist groups vying for power. Places like Derna and Sirte fell to ISIS or the so called Islamic State of Iraq and the Levant.

Alarmed by the crisis, the UN held various meetings in a bid to find lasting solution to the escalating conflicts in 2015. However, GNC didn’t make it to the table. Along the sidelines, the UN supported another dialogue process through a Special Representative of the Secretary-General (SRSG) for Libya, Bernardino Leon. The most telling part is that Leon made progress in getting a political agreement for a smooth transition of power. Finally, in May 2018, the rival leaders agreed to hold both Parliamentary and Presidential elections.

So how has Democracy fared in Libya? The much feted democracy has only made things worse for Libya with more fighting and bloodshed. Time and again, it’s chilling how invasions for democracy give birth to religious extremists who manage to attract people from all over the world in the name of a heaven no one has ever seen. Like Afghanistan and Iraq, Libya too is in the throes of religious fanatics.

And, Libya is one country that can’t afford oil falling into the wrong hands as oil and gas account for more than ninety-five percent of its exports. Right now, as we mentioned earlier, Libya is divided into two. The western part is ruled by the UN-backed government in Tripoli. The Eastern half is being held by Haftar,

Khalifa Haftar

Khalifa Haftar was part of the Gaddafi led group when they ousted the King from power. A military officer, he was in charge of the Libyan forces fighting in Chad in the eighties. Haftar and his men were not only defeated but also captured alive in Chad. Promptly, he was disowned by his buddy Gaddafi.

From then on, Haftar spent his time, almost four decades, trying to give back to the Libyan ruler. It was a patient game ridden with many failures. As you know, he succeeded in overthrowing Gaddafi in 2011. After returning to Libya from Virginia, he became the commander of a group of rebel forces in the East. Benghazi was still under the control of Islamist groups waging attack against civilian and police targets. In 2014, he asked Libyans to oust the General National Congress and launched ‘Operation Dignity’ to fight against the militant groups in Benghazi. Indeed, credit where due, Haftar, was instrumental in regrouping the Libyan National Army (LNA). Meanwhile, the House of Representatives (HoR) replaced GNC and Haftar was appointed as the commander of LNA.

By 2016, the LNA had ousted the militants from Benghazi to form a parallel government. After taking over some important oil terminals, this citizen of US was appointed as the Field Marshal. But what made him a star of the international community was his successful fight against the violent ISIL in 2017. He was seen as a credible force against radical Islam in Libya notwithstanding his close-ties with Saudi Arabia. The same year, Libyan oil accounted for 0.9 percent of global production with 817. 3 thousand barrels a day, a far cry from the 3 million barrels a day it was producing in the seventies. Still, not a small figure either as production could only increase as Libya has enviable oil reserves. It was just a matter of time, really.

Now, Haftar has decided, is his propitious time. Not waiting for the elections due at the end of this year, Haftar is exploring his ambitions with blatant grand moves. After all, what’s in line is billions of dollars in oil revenue, foreign reserves and power. And, this man was never a fan of democracy, to begin with.

His LNA took over the Al-Sharara oilfield near Tripoli and El-Feel oil field this year. This April, LNA also made moves to capture Tripoli, where the elected GNA is based. Incidentally, Haftar had just returned from a meeting with King Salman of Saudi Arabia before launching the latest offensive. Not surprisingly, many consider him a stooge of the US and Saudi Arabia.

GNA has announced that Tripoli would be defended against LNA. Haftar is promising order, stability and control in a conflict ridden nation. Though the reality is wrestling control over Libyan oil, he does have international support than the elected Government. Look at the details: Italy supports the GNA while countries like Egypt, UAE, France and of course Saudi Arabia are backing Haftar. In fact, Haftar has the backing of Trump to overthrow UN backed government too. Whatever it is, there’s no denying the fact that he controls two-thirds of Libya at present with a proper army. Thousands of people have fled Tripoli because of Haftar. Hundred have died, while thousands wounded in the latest offensive. The United Nations call for a week-long truce has been met with indifference.

Should Triploi fall to him, Haftar’s consolidation will actually begin with a centralized structure. Another civil war is brewing in the desert country beset by violence and bloodshed. For Libya, one Col. Gaddafi is gone while another has cropped up. Eerily, the new one behaves like a brutal monarch already. Could he save Libya though?

The reality

It’s a man made mess of Libya. The country had eight years to fix itself but didn’t. Today, refugees flood European cities despite Libya’s incredible oil riches. Thousands of asylum seekers from Libya anguish in detention homes. The democracy that came in with much fanfare has failed miserably as political instability continues. What we saw in Iraq, repeats in Libya as well. To put it bluntly, UN shares the blame too. It tried hard only to install a ragtag government that makes our own politicians look benign in comparison. Meanwhile people continue suffer. Every foreign government involved only wants the oil. It puts diplomats in an awkward situation when their own respective Presidents all agree to do the opposite behind their backs.

Historically only military dictatorships have brought stability to Libya and neighboring countries. Is it cultural? Democracy just doesn’t seem to work in Libya. This Gaddafi-style general seems like the only viable alternative in a nation that can’t govern itself.

Foreign powers have realized this and are assisting this new Gaddafi. In that context, he’s exactly the only workable option. That’s something to behold in the pessimistic narrative of Libya. The fact is, Libya can afford to have Haftar but not the rampant everyday violence. Rather Haftar than the bloodthirsty extremists threatening to murder the country and its resources. Does the UN love him? No! But he remains the prettiest horse in the glue factory. Along the way, his army follows him.


Initially, contrary to popular opinion, President Trump backed the elected government. Of late though, predictable for his unpredictability, he has been backing Haftar, particularly in the offensive on the Libyan capital. Egypt and Saudi Arabia may have played a role in this switch. The US believes that Haftar’s military can unify Libya. That said, Trump’s support may not help prevent the escalating crisis in Libya. Indeed, it’s a slap in the face of UN too. It had a bright chance but failed to bring the rule of law in eight eventful years.

With Iran’s oil off the market and instability in Venezuela, Libyan oil is worth its weight in diamonds. It’s all about the oil. Stable oil flow means stable oil prices. Everyone wins. Well, one cannot have that much oil, remain a basket case for eight years and think nothing will happen

So far as solutions go, as we said earlier, a democratic process may not work. There are too many military groups in Libya armed to their teeth. Whoever emerges victorious in Tripoli would also be capable enough to lead Libya.

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