• 1 min UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 hours Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 4 hours Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 6 hours German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 7 hours Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 9 hours Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 1 day Oil Prices Rise After API Reports Major Crude Draw
  • 1 day Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 1 day Gazprom Speaks Out Against OPEC Production Cut Extension
  • 1 day Statoil Looks To Lighter Oil To Boost Profitability
  • 1 day Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 1 day Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 1 day Whitefish Energy Suspends Work In Puerto Rico
  • 1 day U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 2 days Thanksgiving Gas Prices At 3-Year High
  • 2 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 2 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 2 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 2 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 2 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 2 days ConocoPhillips Sets Price Ceiling For New Projects
  • 5 days Shell Oil Trading Head Steps Down After 29 Years
  • 5 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 5 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 5 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 5 days Venezuela Officially In Default
  • 5 days Iran Prepares To Export LNG To Boost Trade Relations
  • 5 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 6 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 6 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 6 days Rosneft Announces Completion Of World’s Longest Well
  • 6 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 6 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 6 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 6 days Santos Admits It Rejected $7.2B Takeover Bid
  • 7 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 7 days Africa’s Richest Woman Fired From Sonangol
  • 7 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 7 days Russian Hackers Target British Energy Industry
  • 7 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
Alt Text

The Undisputed Leader Of Tomorrow’s Oil & Gas Markets

According to the Executive Director…

Alt Text

Norway’s $35B Oil Stock Dump Could Hurt The Industry

The world’s largest sovereign wealth…

U.S. Unable To Halt ISIS March Towards Libyan Oil

U.S. Unable To Halt ISIS March Towards Libyan Oil

The Islamic State (ISIS) is taking on recruits faster than anyone can keep up with, and it’s heading towards Libya’s oil crescent, eyeing billions of barrels that a country at war with itself cannot protect—even with U.S. air strikes.

In mid-December, the United Nations brokered a power-sharing agreement between Libya’s rival factions, but there is no chance of implementing this. That means there is no chance that the Libyan government can fight back the advance of ISIS. Things are about to get messy, and U.S. air strikes will put only a small dent in a big problem.

According to U.S. intelligence figures, there are an estimated 6,000 ISIS fighters now in Libya, headquartered in the town of Sirte, as Oilprice.com has reported in the past. From here, they control hundreds of miles of coastline. There is nothing in Sirte they want; this is simply a strategic base. Related: Gulf States Not Willing To Cut Production Despite Asset Depletion

ISIS fighters have also been tracked down to Benghazi, but here they have not solidified control yet. Still, Benghazi is an important recruitment venue. More specifically, this is where it can combine forces with it radical brethren in the form of Ansar al-Sharia and other radical factions. Benghazi is where ISIS gets bigger. And its pace of recruitment is faster than anything we’ve ever seen before. It absorbs new radical factions wherever it goes. The more successful its attacks and territory grabs, the more successful its recruiting becomes. In Libya, the former prowess of Ansar al-Sharia has quickly waned. ISIS is more brutal, and more decisive. It’s either join or be killed.

ISIS’ ability to launch attacks is not limited to Sirte, which is just the staging ground, or even to Benghazi. It can attack pretty much anywhere using hit-and-runs and suicide bombings.

So what is it after? There is a multipronged strategy here. The first is to get closer to Europe. The second is to get closer to Africa. The third is to get closer to more oil revenues to fill quickly depleting coffers in Syria and northern Iraq.

The ISIS Oil Picture in Libya

There is no oil in Sirte, but ISIS was able to take control of this area because no one was really paying attention. The tribes here are loyal to Gaddafi, but they took a backseat to Ansar al-Sharia, which in turn took a backseat to ISIS when it arrived.

ISIS has largely been allowed to run amuck in and around Sirte because the raging civil war that pits two rival Libyan governments against each other has left the country incapable of fighting off the ISIS advance. But now ISIS is targeting Libyan oil installations—and this is what invites U.S. air strikes. Related: Wall Street Won’t Give Up On Its Energy Bets

Last month, ISIS attacked Es Sider and Ras Lanuf, which lie east of Sirte and beyond its area of control. Es Sider is an oil port, and Libya’s largest export terminal, with a capacity to export nearly 450,000 barrels per day. Ras Lanuf is a refining area. Ras Lanuf has storage tanks, and the tank attacked by ISIS was holding about 400,000 barrels of oil. The attack on Ras Lanuf was captured on video.

Both Es Sider and Ras Lanuf have been closed since December 2014—victims of the civil war that is largely a battle for control over the country’s oil wealth. They are perilously located right between ISIS-controlled Sirte and Benghazi in the east.

But ISIS has farther-reaching oil plans in Libya. It’s going after the producing fields in the southern desert.

(Click to enlarge)

In a video, ISIS made it clear that it had no plans to stop at Es Sider and Ras Lanuf: "Today Es Sider port and Ras Lanuf and tomorrow the port of Brega and after the ports of Tobruk, Es Serir, Jallo, and al-Kufra."

When it gets a foothold in the southern desert’s oil crescent, this will be the point of no return. Related: This Is What Will Cause A Lasting Oil Price Rally

ISIS has already secured the route to the “oil crescent”, which encompasses all the producing fields in the southern desert. It’s done this by taking control of the desert town of Nufaliya, which is about 50 kilometers from Es Sider.

At stake here is Libya’s 48 billion barrels of estimated reserves—the largest in Africa. The civil war alone has shut down over three-quarters of Libya’s production, which might be good for the current oil supply glut, but it’s very bad for Libya and regional stability.

US air strikes won’t likely be enough. ISIS has already cleared a path to the oil crescent, and without a functioning, unified government in Libya, there is no chance of heading them off effectively. Air strikes are but a bandage on a gaping wound.

By Joao Peixe of Oilprice.com

More Top Reads From Oilprice.com:

Back to homepage

Leave a comment
  • CENTURION on February 25 2016 said:
    The only way we stopped Germany and Japan during World War 2 was with constant, massive bombing of their cities. We killed Millions and today we are both proud of it and we celebrate.

    We will lose to ISIS, etc. since we don't have the guts to constantly, massively bomb their areas.
  • GGBUSMGR on February 25 2016 said:
    It doesn't take a tremendous amount of bombing to eliminate oil flowing from Libya. The ports, the pipelines and the refineries. If ISIS can't flow it out of the country then they can't sell it to fund their murderous destruction. It will be sad for this country's plight to come to this. The poor people will be the ones to suffer from ruining their economy. But, they're already suffering from ISIS now. Something needs to be done. But, lets have other countries do their part in this war torn country. The US shouldn't have all the burden.
  • Kurt Womack on February 25 2016 said:
    Amazing how Globull Warming is causing this. /sarc off/
    Seems like a history repeat of the Nazi Africa Korps, only Political Correctness is going to "change" the result.
  • abvgd on February 25 2016 said:
    Since US destroyed Libya's gub'mint US has responsibility to stop ISIS it has created!
  • Ed from NY on February 25 2016 said:
    Did Hillary get Gaddafi's billions of dollars of gold?
  • SuchindranathAiyerS on February 25 2016 said:
    US "unable" or "Unwilling" to halt Daesh? From all available evidence on the ground, the US wants Daesh to control the Oil. From the US perspective, Daesh, which is a regiment of Teliban that the US resurrected to Jeehad bil Saif since it was put to bed by Pax Britannica, is a lesser evil than Muammar Qaddafi. The death, rape, enslavement, beheadings of millions of innocent women and children and Grand Vandalism at the hands of Islam have no meaning to the US. The US expects to partner Daesh as it partnered the Saudis, Qataris, Kuwaitis and so on through Petro-Dollar channels. What the US does not wish to know or acknowledge is that the Jeehad bil Saif it resurrected exists to enforce the Sharia on the rubble of ALL civilizations, beginning with the US.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News