Why Libya’s Oil Crisis Is Spilling Over Into Politics
From Foreign Policy
By Mohamed Eljarh
Libya is running out of oil. This might seem counter-intuitive in a country that still boasts some of the world’s richest reserves of petroleum. But the real problem has less to do with what’s under the ground than what’s happening above it.
Turmoil in the oil industry has been around for a while. Until recently most of the problems in the sector had to do with disgruntled workers striking for better working conditions. Now, however, the oil factor has become an object of the tug-of-war between regional and tribal groups and the central government. The fight over oil is pitting regional and tribal groups against Tripoli and starving the national budget of essential financial revenues from oil exports. (The crisis is also having a big effect on world oil prices, which are rising sharply due to the diminishing quantities of Libyan crude arriving on the market.)
On August 17, federalists in the eastern region announced that they were seizing Libya’s main oil terminals amid allegations of corruption in oil sales deals made by the National Oil Corporation (NOC). Their demands included a transparent investigation into the allegation charges. The federalists in eastern Libya have been calling for autonomy in their region by demanding the restoration of the decentralized government structure that existed under the pre-Qaddafi regime.
The announcement was followed by the deployment of armed groups loyal to the federalists in the Sirte Basin area, where Libya’s biggest oil terminals are located. The Libyan Prime Minister Ali Zeidan and his defense minister Abdullah al-Thani have both threatened to use force against any illegal crude oil shipments from ports in eastern Libya. This comes after international oil marketing companies notified the Libyan authorities that the federalists in control of the oil terminals are trying to secure their own oil sale deals. The government is vowing to use military action against any unauthorized vessel that docks at any of the oil terminals currently outside of its control.
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