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EconomyLibya's oil... an international bet between Moscow and Washington

Libya’s oil… an international bet between Moscow and Washington

- Threats to close Libyan oil worry the United States, which is pressuring producing countries to increase their exports to cover its ban on Russian imports
- It is in Moscow's interest to disrupt Libyan oil exports to thwart Washington's efforts to block Russian oil

– Published on:

Libya is about to turn into a small stone in a major international conflict between Russia and Western countries, which was sparked by Ukraine, but many countries were affected by the fragments of the war, albeit in multiple forms.

After the United States of America imposed a ban on Russian oil imports to its lands, on March 9, due to the Russian military operation in Ukraine , oil prices have exploded in an unprecedented way since 2008, reaching about 140 dollars per barrel.

Washington sought to extinguish the flames of raging oil prices by resorting to its allies and oil-producing partners, and even its staunch enemies, such as Venezuela, which has the largest oil reserves in the world, and whose oil production has been reduced by US sanctions.

Libya is not far from this conflict, especially since it has the largest oil reserves in Africa, and its production has risen to more than 1.1 million barrels per day, especially after the formation of the unity government in 2021, which made the country the second in Africa and the first in the Mediterranean basin in the production and export of oil. , superior to both Angola and Algeria.

However, the return of the division to Libya, and the threat of a number of local parties to halt the production and export of oil in a number of oil fields and ports, threatens the strategic interests of the United States and its European allies, but in return, it serves the interests of Russia, which is militarily present through the Wagner Security Company.

This conflict in the interests of the major countries may fuel conflicts between Libyans, especially with the rise in oil prices and the influx of unprecedented incomes into the country, which has a population of only 7 million, while two governments are battling for power and influence.

Oil crisis on the horizon

Threats to shut down Libyan oil re-entered the arena of political bidding, after residents in the Oil Crescent region (north-central) threatened, on March 11, to close the export ports, if the national unity government continues, and the parallel government does not take over the power.

Oil exports from the four oil crescent ports (Al-Sidra, Ras Lanuf, Brega and Zueitina) represent more than 60 percent of the country’s total exports.

But the most dangerous thing is the announcement by the Libyan National Oil Corporation, on March 6, that it lost about 330,000 barrels per day, due to the closure of the El Sharara and El Feel fields, located in the far southwest.

However, this closure took place at the level of the crude oil pumping valves in the Al-Rayyan area, in the Zintan governorate.

Where crude oil is transported from the El Sharara and El Feel fields, passing through the Western Mountain (Zintan) to be pumped back to the Zawiya port (50 km west of Tripoli) and from there it is exported abroad.

The Chairman of the Board of Directors of the Petroleum Corporation, Mustafa Sanalla, accused “a group of suspicious gangs, led by the so-called Muhammad Al-Bashir Al-Kharj, have closed the crude pumping valves.”

Al-Kharj, claims that he belongs to the Petroleum Facilities Guard, but he leads a gang of his cousins ​​from the Al-Aqraj tribe in the city of Zintan, and he is wanted for justice.

The Al-Kharj gang did not make specific demands, but the head of the Oil Corporation indicated that it “closed these valves between 2014 and 2016, coinciding with the price boom, and all these indicators confirm that it has suspicious links, driven by hidden hands to drag the country into chaos.”

The Al-Kharj gang’s closure of the oil valves of the El Sharara and Elephant fields provoked American and international discontent, especially since the two fields produce about 30% of the country’s total oil production, and it came at the height of high oil prices and a hot international crisis in Ukraine .

This sparked US and international discontent, as the US envoy to Libya, Ambassador Richard Norland , called for “an end to the oil embargo.”

While the deputy head of the United Nations Support Mission in Libya, Stephanie Williams , expressed concern and dissatisfaction with the closure of oil fields and said that “disruption of oil production deprives all Libyans of their main source of income.”, reported by Reuters .

Meanwhile, the Prime Minister of the Unity Government, Abdul Hamid al-Dabaiba , ordered the joint security operations room to take urgent measures to open the valves of the oil pipeline.

Wagner wields its influence

The disruption of Libyan oil exports represents an opportunity for Russia to pressure the United States and its allies not to go far in boycotting Russian oil because of its negative repercussions on its economy.

The decline in Libyan oil exports puts pressure on global oil prices and goes against Washington’s desire to push oil-producing countries to increase their exports and curb price increases, while it is in the interest of Moscow, which will reap huge profits from high oil prices, and will abort Washington’s desire to stifle Russian exports.

As Europe imports a third of its oil needs from Russia, which produces about 14 percent of global production, and exports 60 percent of it to Europe, so it is difficult for Europe to dispense with Russian oil, unlike the United States, which imports only about 2 percent of Russian oil.

Therefore, it is not excluded that Russia will use its influence on the Libyan oil sector as a pressure card in the face of the Americans and the Europeans in particular.

In this context, Libyan media reported a tweet to Wagner’s assistant president, Maxim Shogali, on the “Telegram” application, in which he expressed his support for the “radical measures” he claimed that the head of the stability government, Fathi Pashaga, had taken to protect the country’s unity and the interests of its citizens, including “closing oil exports.

This means that Wagner supports and encourages the closure of oil exports, especially since most of the export fields and ports are under the control of its ally, Khalifa Haftar, the commander of the eastern Libyan forces.

Russia has taken advantage of the Libyan crisis since 2019, and tried to control the oil sector through the Wagner Company, and the Syrian and African mercenaries under its command, and in 2020, it penetrated the Oil Crescent region and was present in oil fields in the east of the country, especially in the Al-Jufra governorate (central) similar to the Zella oil field.

Wagner also penetrated south , towards the El Sharara and El Feel fields (about 900 km southwest of Tripoli), and tried to impose its influence on the region from the Brak al-Shati base (700 km south of Tripoli), but it found resistance from the Oil Corporation, and even from Western countries, where several are active. European companies in the two fields.

In this regard, the head of the National Oil Corporation said, in 2020, “We will not allow the (Russian) Wagner mercenaries to play a role in the national oil sector.”

Where it was agreed to remove Wagner and foreign mercenaries from the oil fields to resume exports, but the Russian influence is still significant, even if it is hidden behind gangs or local residents, or political and military parties.

While it is in Washington’s interest to continue the flow of Libyan oil to European and global markets, and this will only be done through achieving political and security stability in the country, it is pushing for dialogue between Dabaiba and Bashagha, to end the division.

Washington and its European allies are also behind the international initiative calling for the formation of a joint committee between the House of Representatives and the Supreme State for the preparation of a constitutional basis on which elections will be held as soon as possible, ending the legitimacy crisis and allowing the export of Libyan oil and even increasing it, allowing to proceed with the strategy of abandoning Russian oil. Will Moscow be silent?


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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.
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