Field Marshal Khalifa Haftar handed back control of eastern oil installations to the internationally recognised National Oil Corporation (NOC) on 11 July, ending the Oil Crescent crisis which had already cost the Libyan economy over US$1 billion. Haftar had sought to transfer authority over these installations to the unrecognised, eastern NOC after former Petroleum Facilities Guard (PFG) leader Ibrahim Jedhran — who had blocked oil exports from eastern Libya between 2013 and 2016 — briefly recaptured Es Sidra and Rans Lanuf three weeks earlier. Haftar used this incident to revive complaints against the Government of National Accord (GNA) which he alleged supports Jedhran and his allies including by paying their salaries via the Tripoli-based Central Bank.

Haftar threatened to cut off the internationally recognised GNA government from oil revenues indefinitely by transferring authority to the eastern NOC unless the Central Bank governor, Sadiq el-Kabir, was removed from his position. Last week it appeared that this gambit had failed. NOC chairman Mustafa Sanalla announced that force majeure had been lifted on 12 July from the Ras Lanuf, Es Sidra, Zueitina, and Hariga export terminals without any clear concessions having been made to the field marshal. A 1.0 million barrel capacity tanker left from Hariga late on 11 July. Production also quickly resumed at Abu Tifel oil field, connected to Zueitina, which had shut down during the Oil Crescent crisis. Sanalla noted that production should quickly return to normal although this is unlikely until the severely damaged storage tanks have been repaired and security improves (Libya Politics & Security – 02.07.18 and 09.07.18). Four workers were kidnapped from the Repsol-operated El-Sharara oil field on 14 July which prompted the evacuation of foreign staff.

Haftar’s volte-face was mainly because of staunch international opposition to this attempted violation of UN Security Council Resolution 2146 (2014), and his attack on Sanalla who enjoys robust domestic and international support. Part of Haftar’s miscalculation was that he thought he could count on greater support from Washington. Key US influencers in President Donald Trump’s Administration share many of his views on top priority issues including a very broad definition of terrorism that includes the Muslim Brotherhood.

But, because the Administration does not consider Libya even a second-tier foreign policy priority, Washington was unwilling to take the risk and support Haftar in his effort to pressure the GNA by de-stabilising the international oil market. There were even reports that Trump himself sent a sternly worded letter to Haftar, emphasising that the US would take legal action against him if he did not turn authority for the eastern installations back to Sanalla. Senior French government officials were also reportedly livid over the Oil Crescent crisis.

In the end, Haftar was unable to sell oil independently to undermine the GNA or to unseat el-Kabir. The EU very publicly demonstrated its continued support to the GNA as the recognised government of Libya on 14 July, when Vice President of the European Commission, Federica Mogherini, met Prime Minister Fayez Serraj in Tripoli and offered more student visas to Europe, medical care, and support to municipal governments, as well as enhanced Coast Guard training. The incident highlighted a major difference between Jedhran’s successful bid to cut off revenues to the GNA and Haftar’s similar effort: Jedhran is just a thug trying to get a pay day by taking advantage of political dysfunction; while Haftar has a political future to protect and therefore much more to lose.

Yet there are already signs that Haftar escaped from the Oil Crescent crisis relatively unscathed. In their 12 July joint statement the governments of France, Italy, the UK, and the US welcomed the resumption of oil production. They were, however, careful to mention the important role that Haftar’s self-styled Libyan National Army (LNA) plays in ‘restoring stability in Libya’s oil sector’ despite the fact that it had deliberately disrupted it for political reasons. The statement also called for a Libyan-owned discussion about economic reform and fiscal transparency which opens the door for Haftar and his supporters to continue to press for el-Kabir’s removal as part of the dialogue.

Sanalla echoed this statement and conceded that there needs to be a serious discussion about how to fairly distribute oil revenues regionally. Haftar has sought to rally easterners behind him by accusing the GNA of withholding revenues that should be remitted to the east. While Haftar may have miscalculated the risks of cutting oil production, his opponents are also scrambling to address the issues that he raised in order to prevent a repeat of the Oil Crescent crisis. Ultimately, Haftar has the capacity to cut off production and exports again if he wants to while the GNA and its allies are unable to control his behaviour.

this article was taken from our Libya Politics & Security publication. If you wish to discuss the contents of this article, or to talk about either this or our Libya Focus publication then please contact us.