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Gaddafi’s son. General Haftar. Libya’s former interior minister Fathi Bashagha. Former Prime Minister Ali Zeidan. Prime Minister Abdulhamid al-Dbeibah. Parliament speaker Aguila Saleh. These are the official candidates for Libya’s December 24th presidential elections. It’s a list that suggests renewed civil war. Haftar is the key controlling figure in the east, and of the Libyan National Army (LNA). Gaddafi’s son is wanted by the International Criminal Court (ICC) for crimes against humanity. Bashagha has been playing all sides from the Turkey alliance to the rival Haftar-supporting side backed by Russia, Egypt, and the UAE. Meanwhile, Saleh is nominally perceived as a Haftar ally from the east, though he also benefited nicely from the General’s failure to take Tripoli. He also wrote the only existing electoral law that was rushed through. There is no unifying candidate to avoid bloodshed here unless we consider al-Dbeibah. At the same time, a “unifying” candidate, in this case, means a powerless one.
Why do we care what happens in Libya from an energy crisis perspective? The US and China are presently discussing a jointly timed release of their strategic petroleum reserves. If they do this, and Libya descends into chaos again, which will surely be played out on the oilfields in the form of hijacked or completely halted production, removing another 1.2 million bpd from the market (Libya’s current production…
Gaddafi’s son. General Haftar. Libya’s former interior minister Fathi Bashagha. Former Prime Minister Ali Zeidan. Prime Minister Abdulhamid al-Dbeibah. Parliament speaker Aguila Saleh. These are the official candidates for Libya’s December 24th presidential elections. It’s a list that suggests renewed civil war. Haftar is the key controlling figure in the east, and of the Libyan National Army (LNA). Gaddafi’s son is wanted by the International Criminal Court (ICC) for crimes against humanity. Bashagha has been playing all sides from the Turkey alliance to the rival Haftar-supporting side backed by Russia, Egypt, and the UAE. Meanwhile, Saleh is nominally perceived as a Haftar ally from the east, though he also benefited nicely from the General’s failure to take Tripoli. He also wrote the only existing electoral law that was rushed through. There is no unifying candidate to avoid bloodshed here unless we consider al-Dbeibah. At the same time, a “unifying” candidate, in this case, means a powerless one.
Why do we care what happens in Libya from an energy crisis perspective? The US and China are presently discussing a jointly timed release of their strategic petroleum reserves. If they do this, and Libya descends into chaos again, which will surely be played out on the oilfields in the form of hijacked or completely halted production, removing another 1.2 million bpd from the market (Libya’s current production rate, though it’s targeting 2 million bpd in an ideal scenario where elections go off without a hitch and the losing factions give up their designs on the country’s oil riches).
We’ve gone through the complete removal of Libyan barrels from the market before. In fact, it was about this time last year that a ceasefire deal allowed Libyan production to go back online after a 2-year hiatus. But this time last year, oil prices were only in the $40 range (Brent ~$44, WTI ~$42). No one was terribly concerned about Libyan oil. Rather, there was more concern about how much further oil prices would tank if Libya unleashed its barrels. Today, with oil prices soaring in the $80 range and a lineup of forecasts calling for $100+ oil in 2022, the sudden absence of Libyan oil would require someone to chip in to fill in the gap.
If the US and China (or South Korea, Japan) release oil from the SPR, some may find themselves without sufficient reserves to carry them through the crisis--particularly China, which imports a healthy amount of Libyan crude. The SPR is meant to fill in the gap during times of production/supply crises (such as the Libyan war in 2011), not as a tool for lowering oil prices (that’s OPEC’s job). There are two diverse political groups in Washington pushing and pulling at Biden. White House energy advisors are categorically against an SPR release, but other factions that refuse to view this from an energy perspective are pushing for an SPR release simply because the president’s ratings are dropping largely because gas prices are soaring and Americans won’t stand for paying this much at the pump. Prices at the pump and utility bills are two things that can make or break a presidency.
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