The divisions in Libya are over control of power and wealth, in a country where wealth is derived almost exclusively from oil revenues. As the Tripoli offensive goes on, this source of income will likely become a crucial part of it.
Libya has estimated oil reserves of 48 billion barrels, the largest in Africa and 9th largest in the world. Technically recoverable reserves of shale oil are estimated at 26 billion barrels. Oil and gas exports constitute around 90 percent of Libya's revenue, and any major disruption means a sharp decline in income.
Libya has a typical rentier economy, in which the state is the main employer, providing salaries for almost 1.8 million people, representing close to a third of the total population.
The country’s lucrative oil and gas market attracts fierce global competition, especially among international fossil fuel conglomerates. It also makes controlling this vast natural resource a prime driver of conflict among Libyan groups, with many competing to secure a share of the benefits.
But will the current escalation in violence lead to a wider conflict over the control of Libya’s oil resources?
In 2016, Haftar seized control of the facilities and terminals in Libya’s east, mainly in the oil crescent region, and he later extended his control to facilities in the south, taking the El Sharara and El Feel oilfields. The internationally recognised Government of National Accord (GNA) in Tripoli still controls other offshore facilities.
Revenue from oil exports, however, still flows into Libya’s Central Bank in Tripoli, which works alongside the GNA. The National Oil Corporation (NOC), which dominates the country’s oil sector, has tried to stay out of political conflicts and remain a neutral institution.
Adding to the complications of Libya’s conflict dynamics, the unrecognised eastern government allied to Haftar has set up a parallel NOC in Benghazi that has repeatedly tried to sell Libyan oil on the foreign market. Such attempts have been stymied by a UN Security Council resolution preventing illicit crude oil exports.
Recent reports indicate that Haftar is now militarising oil installations in the oil crescent region, and has begun to use oil ports and air fields for war activities.
Following this move, the NOC released a statement condemning the use of its facilities for military purposes, detailing the seizure of the Es Sider airstrip and the docking of warships in the Ras Lanuf terminal by Haftar’s forces.
According to a French presidential official, Haftar complained that he and his forces were not benefiting from oil sales in the east of the country, and also rejected calls for a ceasefire during a recent visit with President Emmanuel Macron.
Despite the fact that Haftar controls most of the oil assets in Libya, his complaints show that he may now be seeking access to income from Libya’s oil wealth. This points to a shift in direction by Haftar, in which he may be willing to drag control over Libya’s oil exports and revenue into the ongoing conflict.