While Libya is continually calling for foreign oil companies to expand investment in the country, there are indications that the conflict is coming full circle, with east (the powers in Benghazi) and west (the powers in Tripoli) rattling sabers over control of oil and oil revenues.
Three weeks ago, General Haftar backed a proposal to set up a new rival interim government to challenge the GNU in Tripoli. Last week, threats emerged from the east of another oil export blockade until the distribution of oil revenues is sorted. This has never really been addressed, and until it is, Libya will not be able to peacefully hold elections. It’s always been about control of the oil and oil revenues, with Haftar’s LNA maintaining the capability to physically block oil exports, and Tripoli maintaining the capability to control oil revenues and how they are dispersed. Any new investments in Libyan oil must take this into account. Nothing has changed and the “peace” that Libya currently enjoys is simply the calm for a regrouping of forces for war. Haftar has issued a clear ultimatum: Come up with a fair division of oil revenues by August or there will be another oil export blockade.
We are now in a situation in which General Haftar’s LNA has been mobilized and prepared for action, while “talks” are apparently being undertaken by both sides on revenues. To this end, a “Financial High Committee” has been forced to address how…
While Libya is continually calling for foreign oil companies to expand investment in the country, there are indications that the conflict is coming full circle, with east (the powers in Benghazi) and west (the powers in Tripoli) rattling sabers over control of oil and oil revenues.
Three weeks ago, General Haftar backed a proposal to set up a new rival interim government to challenge the GNU in Tripoli. Last week, threats emerged from the east of another oil export blockade until the distribution of oil revenues is sorted. This has never really been addressed, and until it is, Libya will not be able to peacefully hold elections. It’s always been about control of the oil and oil revenues, with Haftar’s LNA maintaining the capability to physically block oil exports, and Tripoli maintaining the capability to control oil revenues and how they are dispersed. Any new investments in Libyan oil must take this into account. Nothing has changed and the “peace” that Libya currently enjoys is simply the calm for a regrouping of forces for war. Haftar has issued a clear ultimatum: Come up with a fair division of oil revenues by August or there will be another oil export blockade.
We are now in a situation in which General Haftar’s LNA has been mobilized and prepared for action, while “talks” are apparently being undertaken by both sides on revenues. To this end, a “Financial High Committee” has been forced to address how oil revenues are spent; however, we do not expect (after years of failure) for these talks to result in any compromise. All the foreign oil investment pouring into Libya right now is jumping the gun.
Russia’s war on Ukraine has also changed the geopolitical landscape with respect to Libya. Washington is no longer supporting Haftar (who is backed by Russia’s Wagner mercenaries), and Libya has now become a greater threat to NATO’s southern flank, threatening dangerous destabilization in the Sahel region, including Haftar’s meddling in the raging conflict in Sudan, which borders Libya. The key U.S. goal right now is to get foreign mercenaries out of Libya and Sudan (by which they mean Wagner). To this end, Washington is busy lobbying Haftar supporters (which used to include Washington) such as Egypt and the UAE to force the general to give up Wagner support, upon which he depends to a fair extent to maintain his control over oil export facilities.
Other external actors to keep an eye on here include Turkey and Egypt. While Egypt has supported General Haftar and Turkey has backed the rival GNU government in Tripoli, a thaw in relations between Cairo and Ankara could also impact Libyan alliances.
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