Protracted Civil War in Libya Will Drive Oil Prices Past $80

The battle for Tripoli is raging between two unevenly-matched Libyan armies. Both have international backing; both are bidding for the support of local militias. Whichever army comes out ahead will gain full control of Libya’s huge oil industry. But the Libyan National Army (LNA) advancing on Tripoli, the capital, under the command of Field Marshal Khalifa Haftar, is not the invincible fighting machine it is sometimes cracked up to be. By comparison, the force defending Tripoli, commanded by Fayes Al-Sarraj of the UN-backed Government of National Accord (GNA) is better organized and professional. With the two powerful militias, the Misrata Brigades and the Zitan Brigades, on his side, Sarraj is capable of repelling the Haftar-led army’s assault on his seat of government.

Sarraj has important international assets. The pro-government force is not only backed by the UN Secretary Antonio Guterres and Italy’s PM Giuseppe Cont. Behindthe GNA too are German Chancellor Angela Merkel and British prime minister Theresa May.

Haftar too is not alone. Russian President Vladimir Putin, French President Emmanuel Macron, Saudi King Salman, Egyptian President Abdel-Fatteh El-Sisi and the UAE’s Crown Prince Sheikh Muhammed bin Zayed are on his side. Moscow gives Haftar weapons; Egypt and the UA air support and ammo; and France has sent over special forces instructors to train the LNA troops and lead them in some of its battles.

While Haftar’s backers say they support his bid to conquer Tripoli – he already controls most of eastern Libya – for his relentless battles against the Islamic State and other extremists – what they are really eyeing is control of Libyan oil, which has the largest reserves in Africa and is among the ten largest globally..

Some months ago, Haftar’s army, with Egyptian and UAE assistance, captured the oilfields of the south, including Libya’s largest field at Sharara. He also attained control of some of the terminals in the West, through which Libya exports its daily output of 1.2 million barrels. Moscow dispatched troops, equipment and private contractors to support Haftar; keen on regaining the large military contracts lost after the US-led overthrow of Muammar Qaddafi. President Putin believed that Haftar would turn the clock back.

Haftar calculated that his march on Tripoli would spur militia groups in the West to quickly change sides, joining his forces and allowing him to rapidly conquer the city. His offensive in the south was rapidly accomplished through the crafting of alliances and stirring up of rivalries among southern tribes. Although Haftar’s hold on the region is tenuous, he holds a valuable lever in any future negotiations. By capturing Tripoli, the LNA would hold the key to Libya’s biggest refinery and oil-export terminal at Zawiya, 50km west of the capital. This would make Haftar virtual overlord of Libya’s entire oil industry.

Until now, Haftar’s army has refrained from cutting off the flow of oil to Zawiya – partly in in the hope of swinging the Misrata and Zintan Brigades, with which he is in secret talks, over to his side. If these talks are successful, his army could walk into Zawiya without firing a shot (see attached map). But if he fails, and the Tripoli region is plunged into protracted civil war, the Libyan oil industry will grind to a near-halt and its 1.2 million bpd exports will shrink to a quarter of a million at most or dry up completely.

This peril affects the American interest. Secretary of State Mike Pompeo, aside from demanding that the two sides stop fighting, has until now abided by the Trump administration’s policy to stay out of it, since Libya is not an area of American interest. Officially the US lines up with the UN in backing the Tripoli Government of National Accord. As the May 8 deadline for increasing sanctions on Iran draws near, the US must decide whether to continue its policy of sanctions waivers for permitting certain countries to purchase Iranian oil. Cancellation of the waivers and the continued crisis in Venezuela would boost oil prices past $80 bpd, which the Trump administration would regard as harmful. It therefore behooves Washington to step into the war impasse evolving around Tripoli before it’s too late.

The frontline has come to a halt just outside the capital. Some of the smaller towns, like Rujban and Surman have shifted allegiances to the LNA, but most militia groups have mobilized to defend the capital against its fall. Even the large Bunyan Marsus militia from the city of Misrata and the militia from Zintan dispatched troops to defend Tripoli although the Zintans leadership is divided on whether to support the GNA. Haftar’s troops are slowing down having failed to breach the barriers against their advance into Tripoli. A hazardous impasse is developing. Washington’s continued ambivalence in Libya or support for Haftar could allow the flames of civil war to spread.