After years of reticence to reengage as the situation in Libya increasingly spiralled out of control, the European powers—and particularly France and Italy—are finally wading into the debate over how to put an end to the civil war which has wracked the country for the better part of a decade. The ball is currently in Rome’s court, with the Italian government organizing a conference in Sicily on November 12-13 to “find a common solution, even though there will be different opinions around the table.”We have quite a few posts on Libya. A couple from earlier this year:
Why the about face? Beyond the issue of migration, volatile oil prices, coupled with uncertainty over the ultimate fate of Iranian crude, are the international community added incentive to take the country seriously: analysts are increasingly looking to Libya and Nigeria as the only swing producers that could keep oil under the $100 mark.
The fluctuations in the oil markets are obviously more complex than that, but Libya’s growing output has nonetheless been able to stave off some unexpected production declines – such as the 150,000 bpd drop in Iranian production that was offset by Libya’s 100,000 bpd jump. Saudi Arabia boasts that its total spare capacity is in excess of 1.3 million bpd, but that won’t cover the almost 2 million bpd Iran exported in August. With the Trump administration’s Iran sanctions kicking back in November 5, Libya’s importance to the stability of the global oil markets will only increase in importance.
As Libya’s role grows, so does Europe’s new-look engagement. While the Italians are sending out invitations to Sicily, the French are continuing to push for the December 10 elections they got the opposing sides to agree to back in May. Rather than encouraging immediate elections, the Italian government promised $5 billion of investment in exchange for Libya cracking down on migrants in the Mediterranean.
Against this backdrop, it doesn’t take a cynic to see mercantilist motives as the driving force behind the newfound impetus to fix Libya, the country with Africa’s biggest oil reserves. France would love to install a diplomatic ally in North Africa, while oil titan Eni — 30% owned by the Italian state — just acquired a controlling stake in BP’s Libyan assets. Given that Eni hopes to resume oil and gas exploration, there’s an urgent need to resolve rampant corruption and instability in the Libyan oil sector. A few days ago, chairman Mustafa Sanalla of the Tripoli-based national oil company claimed BP and Eni could help his country expand production by “hundreds of thousands of barrels” from the first quarter of next year. Of course, Sanalla’s company is just one of two rival “national” firms in Libya.
Regardless of their motivations, Western attempts to begin repairing the damage they caused in Libya are a welcome change to the status quo of interminable instability.
Oil: the solution to Libya’s problems or another layer of the crisis?Libya’s oil crisis is merely a reflection of the wider schism in the country, effectively split down its geographical centre as the civil war drags on....MORE
"Libya’s January Oil Production Highest In Nearly Five Years"
Mr. Obama, Mr. Cameron, About that Libya Thing
And in 2016 a masterful bit of gamesmanship:
"Libya Threatens to Open Migrant Floodgates Into Europe"
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