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Libya: The Fate of Oil under an Impotent Government

As all attention is focused on Syria, and wondering how oil prices might respond to a US strike, where oil is concerned the focus should be on Iraq, which is about to implode from sectarian violence, and Libya, which is now producing at about one-tenth its capacity, challenged by a variety of militant forces created by the last big intervention two years ago.

In this report we examine the current situation in Libya, and how this is affecting production and global oil prices.

Crisis in Full Force

The oil industry has all but been halted, and black outs are becoming more frequent as utilities don’t have the fuel to provide. This will further feed the fire of strikes, protests and the multi-pronged battle for control of the country’s resources.

The crisis began two years ago with the overthrow of Muammar Qaddafi, but in August things took a definitive turn for the worse, with armed groups seizing major oil export terminals and demanding autonomy for the eastern region. Now the crisis has reached the west where other militant formations ominously charged with guarding the country’s pipelines and oil fields are seeking to profit on the momentum of the strikers and protesters in the east.

The interim government cannot manage this crisis. It’s already been forced to compromise, agreeing just last week to a 20% wage hike across the board for civil servants, and including oil security forces in this mix. At the same time, the…




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