Libya’s instability could help OPEC reach target

Political uncertainty and the acceleration of armed confrontations in Libya could push the price of oil a little higher. As OPEC tries to enforce the agreement to cut oil production with a view to a lasting rise in the price of oil’s barrel, the weakness or even the halt of Libyan production could unwittingly help it achieve its goal.

While the Russian energy group Rosneft signed an agreement with the Libyan National Oil Company (NOC), the Libyan National Army (LNA) of General Khalifa Haftar was attempting to regain control of the main oil terminals of Es Sider and Ras Lanuf from Islamist militants of the Benghazi Defense Brigades (BDB).

To sum up, three forces are fighting for control of the country and especially of its oil resources. Challenged on the ground, Haftar’s forces would control most of it, while the UN-recognized government of national accord (GNA) based in Tripoli rejects the de facto autonomy of the eastern part of the country.

From a strategic standpoint, analysts believe that the West would prefer the GNA from the LNA which would benefit from increasing support from Russia, eager to develop its interests in North Africa. Islamists, who represent the bulk of the activists who overthrew Colonel Muammar Gaddafi in 2011, continue their activities without anyone really knowing which faction, the “moderates”, Al Qaeda (AQ) or the Islamic State (ISIS) is the most important.

The overall situation in Libya thus remains bad and seriously impacts the oil industry, which accounts for about 95% of national revenues. However, energy groups continue to work at building their interests in the country in the apparently distant perspective of its stabilization.