Tripoli Government's Counterattack Promise Lifts Oil Jitters

The operation, dubbed “Volcano of Anger,” seeks to “cleanse all Libyan cities of the aggressors,” the Government of National Accord’s military spokesman, Mohamed al-Qonuni, said in a brief televised statement.

Haftar’s self-styled Libyan National Army, or LNA, last week began an advance on the capital, Tripoli, to a chorus of international condemnation. Their move coincided with a visit by UN Secretary-General Antonio Guterres and came less than two weeks before a UN-organized conference that was meant to search for a negotiated resolution to the country’s divisions.

While the latest fighting is south of Tripoli -- away from most of the main oil ports and fields -- the risk of disruption rises the more inflamed tensions get. Western Libya is home to the Zawiya oil terminal, the export point for crude pumped from the country’s largest field, further south at Sharara.

Drawn Out Conlict
A drawn-out conflict would force the LNA “to commit increasing amounts of military and financial resources to its war effort,” Hamish Kinnear, a senior analyst at consultancy Verisk Maplecroft, said in a note. “This means the group will have to dial down its already limited presence in oil producing areas of the oil crescent and the south west, raising the risk of disruption to production.”

The fighting on Tripoli’s outskirts continued on Saturday despite global pleas for calm. At least 35 people have been killed in the clashes since Wednesday, according to figures from the Government of National Accord and the LNA.

The U.S. Africa Command said in a statement that it was temporarily withdrawing troops from Libya in response to “security conditions on the ground.”

Italian oil giant Eni is monitoring the developments in Tripoli “very carefully,” and the situation at the fields is under control, a spokesman for the company said in a message. He said Eni currently doesn’t have any staff in the capital. Separately, Mellitah Oil & Gas, a venture between Italy’s Eni and Libya’s state-run National Oil Corp., asked its Tripoli-based employees who live in neighborhoods “witnessing security tension” not to go to the office, according to a statement on its Facebook page.

Libya Fighting Erupts Again. Here’s the Oil Impact: QuickTake

Haftar has said that his push to Tripoli is aimed at combating militias in the area, which he said had sown chaos. But Prime Minister Fayez al-Sarraj, who heads the UN-recognized government, accused the eastern-based warlord of backtracking on earlier promises to work toward a political compromise. Haftar’s advance “will be met only with decisiveness and force,” Sarraj said.

The escalating rhetoric seems poised to deepen the chaos that has engulfed Libya in the eight years since Moammar Al Qaddafi was toppled and killed.

Rival militias have become the main powerbrokers in the North African country, with the Tripoli government commanding few cohesive forces and relying more on allied militias. Those same groups have vowed to meet Haftar’s offensive with force.

Meanwhile, Haftar, while repeatedly stressing he was committed to peace, has advanced steadily from his eastern stronghold to the south, and now to the west.

While he commands the country’s most organized force, Haftar lacks the oil funds that could finance his attack and bolster his bid to extend power over the fractured country. Analysts have said money could be a reason why Haftar is willing to stretch his forces with a run at Tripoli.

“The strength of LNA security over oil and gas sites was severely tested during a temporary takeover of the oil crescent ports in June 2018,” said Kinnear. “A repeat of this scenario becomes increasingly likely should fighting in the west drag on.”

He said the 300,000 barrel per day Sharara field, “will also be at a higher risk of renewed disruption while the LNA is distracted in the north west.” DM