On March 14th Libyan National Army (LNA) forces retook the export hub of El-Sider and the nearby refinery of Ras Lanuf from the Benghazi Defense Brigades (BDB), an Al-Qaeda linked group, who took it from the LNA on March 7th. Now the LNA will have to restart oil production, which shut down after the BDB takeover.
For the brief time BDB controlled the facilities they had promised to administer them under the authority of the U.N.-backed Government of National Accord (GNA) in Tripoli. The GNA does not have an army or even control its own capital so it works closely with Islamist militias like the BDB.
This alliance is likely due to ideological affinity because GNA is under the control of Islamists. So Islamist groups like the BDB may ally themselves with Tripoli because it could help them spread their ideology through Libya.
The GNA’s National Oil Company (NOC) is the recognized international authority to export and sell Libya’s petroleum on the international markets. The LNA under the command of Gen. Khalifa Haftar does not. Gen. Haftar is loyal to Libya’s Tobruk government. The Tobruk government was previously the recognized government, until the United Nations insisted that the warring factions accept a coalition unity government under UN auspices.
The lack of international recognition did not stop the LNA from repairing El-Sider and Ras Lanuf and getting them back in running when they captured the facilities last September. This caused oil production to jump from 300,000 barrels per day to 700,000 in February.
Most of those barrels were probably sent to Russia and China. On January 17, 2017 the Tobruk government announced that it had signed 29 oil contracts and among the signers were Russia and China.
Such a deal could mean an infusion of cash and might allow the eastern government to redeem the $4 billion worth in Russian arms contracts that Moscow made to the Gadhafi government. Gaining access to Russian arms may tip the civil war decisively in Tobruk’s favor.
LNA retaking the El-Sider and Ras Lanuf facilities from the BDB will likely not end the conflict over Libya’s oil refineries because these facilities could be vital to deciding the course of the civil war.
As of March 14 the price of a barrel of oil stands at $48.80 with a year projection of $55. Libya was producing 620,000 bpd according to their Nation Oil Company (NOC) estimates on March 9th. This is a decrease of 80,000 due to the clashes at El-Sider and Ras Lanuf.
The output is down, but with the current price of oil Libyan refineries could generate large profits for the LNA or the GNA. This means Tripoli will likely try to retake the facilities at El-Sider and Ras Lanuf.
The GNA might also use its forces to try to take other LNA-controlled ports like Brega and Zueitina. This would increase their control over the Libyan oil crescent and potentially generate profits for them and their forces, which could mean more money to buy weapons and hire armed groups to fight for the GNA.
The LNA might try to push more into western Libya to keep groups loyal to the GNA away from the oil crescent.
Another possibility could be one or the other side rendering oil fields and refineries inoperable to deny their opponent the use of the revenues. Keeping oil refineries under constant siege could make it difficult for either side to profit from Libya’s oil.
Such a contest is likely to continue as neither side can afford to allow the other to profit from the country’s oil given that neither the GNA nor the LNA currently receive enough military support from their allies to turn the tide of the civil war in their favor.
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