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The Middle East Oil Conflict That Could Be Bigger Than The Iran Crisis

Published in Oil Industry News on Friday, 10 January 2020


Graphic for News Item: The Middle East Oil Conflict That Could Be Bigger Than The Iran Crisis

While all are distracted by the vast display of smoke and mirrors surrounding the US-Iran conflict, General Haftar is taking control of Libya--and all its oil wealth--and the Turks are still making an outsized bet on a Libyan government that everyone else has quietly abandoned.

Turkey started moving troops into Libya on Sunday to support the “internationally recognized” Government of National Accord (GNA) against the forces of General Haftar.

By Monday, Haftar had taken over the strategic city of Sirte, with militia forces aligned with the GNA withdrawing without much bloodshed following a series of airstrikes and then a troop advance by Haftar’s Libyan National Army (LNA).

At this point, despite the fact that it is some 500 kilometers away from Tripoli, Sirte is the backdoor to controlling the capital. It is the boundary of the GNA’s control through various militias that like to refer to themselves as “protection forces”.

After routing ISIS from a 120-mile coastal stretch east and west of Sirte, largely thanks to Haftar, the GNA has since controlled this area stretching from Sirte through Zawiya, 45 miles west of Tripoli. That makes Sirte the entrance point to GNA-controlled territory from the coastal east.

The GNA-aligned militia in Sirte have largely withdrawn westward, toward Tripoli, and Haftar’s next battleground will be Misrata, which is halfway between Sirte and the capital city. Already on Tuesday, reports emerged of clashes en-route to Misrata.

Sirte is Gaddafi’s hometown, and loyalties here are largely up for grabs and go to the highest bidder or the one launching airstrikes. That’s how ISIS won it earlier, and that’s how Haftar is winning it now, aided by airstrikes that cleared a path to entry by forcing a retreat of militia forces.

Misrata won’t be as easy.

Militia forces from Misrata have been the key to defending Tripoli against Haftar, along with a collection of fractious and highly corrupt militias in the capital.

While Haftar lost ground last April, he has recovered since then, and a litany of airstrikes on Misrata in mid-December have already weakened resolve.

The GNA is losing.

The Turks are up against far more than they can handle.

Not only does Haftar enjoy superior air power with help from Egypt, but he’s also now getting the troops he needs to actually move in on the ground after air strikes. That is partly thanks to Russian mercenaries, and reports are emerging of new deployments just on the ground.

Haftar is feeling far more powerful than he did last April, and Misrata’s militia likely fear the highly disciplined fighting force exemplified by the Russian mercenaries.

The biggest area of unease for Haftar right now will be whether Moscow has cut some sort of back-door deal with the Turks that would affect his mercenary support.

Otherwise, it’s Turkish troops against Russian mercenaries, and the only geopolitical save here is that Russia is officially “neutral”, and chances are that Russian mercenaries will find themselves fighting against Syrian Turkmen that Erdogan recruited to fight this battle.

Welcome to 21st Century warfare, and only the Turks have not received the memo that everything is done by proxy these days--not officially.

Whether Haftar takes and holds Tripoli at this point is most decisively answered by Russia’s next move, and whether it cuts a deal with Turkey to withdraw its mercenaries. If it does that, Haftar is not likely to win.

At the same time, Turkey cannot expect to come out unscathed from this even if Russia cuts a deal. Ankara can’t afford to take on Cairo, and Egypt is certainly not going to sit back and let the Turks reroute Haftar.

In the meantime, the West is playing a quiet game of immense hypocrisy.

They’ve all recognized the GNA as the country’s official government, yet no one will lend it a hand against Haftar.

The fact of the matter is that the West prefers Haftar, because it’s been decided that another Gaddafi is just easier when it comes to making money off an oil-rich country that doesn’t just have massive production, but has massive new exploration potential, onshore and offshore. And no one’s getting any slice of this pie with a government beholden to a band of corrupt militias, such as the GNA is.

In this respect, everyone’s got their proxies, from Washington’s tongue-in-cheek calls to Cairo, to the convenient blind eye for Russian mercenaries.

Turkey thinks it’s going to remap the Mediterranean and actually drill for oil here--successfully. It’s not going to play out this way.

Turkey today is a far cry from the Ottoman Empire. It cannot fully defeat Haftar in battle, even without Russian mercenaries, and that’s exactly why it’s using Syrian Turkmen as fodder. It’s a hedge on a bet that the Russians will cut a deal, and if they don’t, the loss of life will just be proxy and won’t resonate as negatively at home. It won’t unseat Erdogan in Ankara.

There are only two scenarios here: Haftar or full-on chaos. No one outside of the oil companies that will benefit from Gaddafi-style stability likes either choice, but the West won’t intervene directly. It can’t be seen to be officially supporting Haftar, nor can it stomach the militias that now own the GNA.

And the chaos could easily resume even if Haftar takes control of Tripoli. The LNA and its domestic alliances are anything but a unified front. They are a fractious collection of tribes that Haftar will have to be careful to appease at every step.

The only sane voice is the Libyan National Oil Company (NOC), which is caught in the middle but dutifully plodding along with its vision of a landmark year for production.

The NOC has been silent for a week now, after noting that it might be forced to halt operations at the Zawiya port and refinery and the giant Sharara oilfield due to air strikes. Such a move would take some 300,000 bpd off the market. 

Source: /oilprice.com

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