21 giant oil fields in Gadamis, Cufra, Murzuk and Sirte enable Libya to easily export oil to different regions and countries. According to OPEC data, there are 48 billion barrels of oil in these four regions. The Libyan National Oil Company estimates this figure to be 65 billion barrels.
Hydrocarbon Basins in Libya (US Energy Information Administration, 2015)
Existing oil reserves and the size of the undiscovered deposits arouse the appetite of foreign countries as well as domestic actors. Libya has Africa’s largest oil reserves and is Europe’s largest oil supplier. Germany, Spain, Italy, France, China, the USA, the United Kingdom and South Korea are among the countries that import the most oil from Libya.
The fact that Germany, Spain, Italy and France are among the biggest buyers among these countries strongly reveals their needs for Libya. This need has increased more during the energy crisis that emerged with the Russia-Ukraine war. In a process where the demand for energy is at a high level, the cessation of oil production and exports in Libya due to political stalemates poses great problems for both Libya and the global economies.
The Political Atmosphere After 24 December and the Dissolution of the 5+5 Joint Military Committee
After the 24 December elections did not take place, the political crisis in Libya deepened. In the following process, the parliament in the east of the country tasked the National Stability Government (MIH), led by Fethi Başağa, to form a government on February 10. Egypt’s influence was in question in the preference of Başağa. Because it was clear that if one of the names affiliated with Haftar was preferred, the political support would only be limited to the eastern region.
On the other hand, Başağa was an influential figure with the support of the Misrata militia in the western region, and was a name suitable for receiving support from the international community, as he served as the interior minister in the government of Fayez al-Sarraj. Therefore, it is in the interests of Akile Salih and Haftar to form a coalition with Başağa until Prime Minister Abdulhamid Dibeybe and the Tripoli region in general are politically ineffective.
After the establishment of the Fethi Başağa government, it can be said that there was an effort by both wings to prevent the political tension that flared up again between the east and the west to be brought to the field. However, the chaotic process that started with political polarization moved to the military side, and large and small conflicts took place. Despite the fact that the Başağa government has been in office for more than 2 months, the fact that it has not yet entered Tripoli and its political ineffectiveness pushes Haftar into an aggressive position again.
The dissolution of the 5+5 Joint Military Committee can therefore be explained. As it is known, the 5+5 Joint Military Committee was established in Geneva, consisting of five military members from the western and eastern regions, following the meetings held under the auspices of the United Nations (UN). The main purpose of the committee is to ensure a permanent ceasefire on the ground. As a matter of fact, the joint committee meeting in Geneva on 19-23 October 2020 signed a permanent ceasefire and ended the conflicts on the ground.
The joint committee, which showed its commitment to the National Unity Government (MBH) established under the leadership of Dibeybe on the same date, opened the Coastal Road, which connects the east and west of Libya along the northern line. In addition, it has made significant contributions to the stability of the country by clearing the critically important Sirte and the roads connected to this city from mines and explosives.
Inviting the parties to restraint and rationality in the political crisis that emerged after the election did not take place, the joint committee showed a constructive attitude by recommending all actors to prioritize the interests of the country over personal calculations. However, the ineffectiveness of Başağa’s government project has put pressure on the Libyan National Army (LUO) officers affiliated with Haftar, who are members of the committee.
In addition, the allegations that NOC provided 6 billion dollars of funds to MBH under Abdulhamid Dibeybe’s prime minister led to an escalation of the current political crisis. In addition, the officers of the committee, who claimed that the salaries of the bureaucrats and soldiers in the east were not paid, announced that they had withdrawn from the 5+5 Joint Military Committee in response to the Dibeybe government. The demands of this military delegation; cessation of oil production and export,
Haftar, the leader of the militia forces in the East, has been targeting oil production in order to cut off the resources going to the central government in his wars against legitimate governments since 2014. Between 2014 and 2020, the Libyan economy came to the brink of bankruptcy due to these attacks. It is estimated that a financial loss of approximately 150 billion dollars was experienced as a result of the attacks on oil production in a 6-year period.
Due to this loss, Libyan Central Bank reserves saw their lowest level in history, the local currency experienced a sharp depreciation and public debts increased. However, Haftar’s attempts to overthrow the government over oil production were not successful.
Haftar repeats the similar scenario, using the 24 December elections as an excuse, for the Başağa government, which he was effective in being elected on February 10, to take over the power. The ability of the Başağa government, which is seen as Haftar’s last chance, to overthrow Dibeybe and survive depends on two factors. The first is Başağa’s entry into Tripoli, and the second is to stop the oil revenues and cut the central government’s budget.
At this point, after getting a vote of confidence for Başağa, he directed his militia to Tripoli on March 10. As a matter of fact, this move failed after the harsh response of the Misrata militias. One day after this unsuccessful attempt by Başağa, on March 11, upon the instruction of Haftar, the military groups in the oil fields announced that they would stop oil production unless Dibeybe resigned.
While these critical developments were taking place, it was revealed that some states held a series of negotiations in order to keep the Başağa government under influence. When the media reported that the representatives of the same country held meetings with the President of the National Oil Company, Mustafa Sanallah, Libyan Oil and Natural Gas Minister Aun demanded the dismissal of the institution’s management.
While these developments were taking place, oil facilities were severely damaged as a result of the attacks on pipelines in the south of Libya by Haftar’s supporters on April 5. In addition, Haftar invited the tribes in the oil fields to protest the government and called for action to stop oil production.
Local people, who took action with this call, The Oil Facilities Guard and Wagner troops affiliated with Haftar stopped more than half of the country’s oil production and exports. For example, tribal components and youth communities in the south have announced that they will not allow oil production and export in the fields in the south and southeast of the country until MBH hands over the management to Fethi Başağa.
Stopping oil production, which constitutes 95% of the country’s income, will not only hit the Libyan economy, but also cause an increase in energy prices in international markets. Oil prices, which increased due to the Russia-Ukraine war, are expected to increase further due to the problems experienced in Libya. As a matter of fact, NOC President Mustafa Sanallah emphasized that the prevention of exports would affect global energy prices and Libya’s economic situation.
In his statement, Sanallah called on the people to react to this situation in order to maintain the flow of the country’s oil to the world energy market. In this context, after the warning of the US ambassador to Libya to restart production, Ali Al Diyb, in charge of the pro-Haftar Oil Facilities Guard, said: He held a meeting with NOC President Mustafa Sanallah and gave the message that production would be restarted. In addition, the USA criticized the hasty transfer of 6 billion dollars to the MBH government with the declaration it published and promised to establish a new mechanism that determines the use of oil revenues, and alleviated the crisis.
As a result, Hafter’s move, which aimed to increase its importance and bargaining power at the international level with the order to stop oil production, backfired. Hafter, who was exposed to harsh reactions from the USA, EU and other countries, received warnings to start oil production. Haftar, on the other hand, revealed his political weakness by claiming that these actions took place outside of his control and that the actors in the region were not effective.