The ongoing rift between political leaders in eastern and western Libya briefly roiled the oil market last week, as both sides seek to control the state’s assets to further their objectives.
As has been the case in several regional countries, United Nations, U.S., European, and other mediators have failed to persuade rival factions to implement a roadmap to forge a unified political and security structure.
Libya’s political crisis has provided opportunity for regional and global actors to empower Libyan factions to advance their agendas.
The infusion of outside weapons technology to Libya’s warring groups sets the stage for the rise of potentially destabilizing non-state actors.
More than five years of international and regional diplomacy has failed to unify the country still divided between rival factions and governmental administrations based in eastern and western Libya – each of which has solidified its grip on power in their respective regions since the overthrow of dictator Muammar Qadhafi in 2011. The failure to forge a unified political and security structure has, in turn, enticed regional and global powers to forge ties to the various factions in an effort to advance their own agendas – and not those of the Libyan people. In addition, the provision of increasingly sophisticated weapons to the warring Libyan factions, particularly armed drones, is not only fueling increasingly lethal warfare between Libya’s groups but also increasing the potential for Libya’s militias to intervene outside Libya or threaten regional commerce.
U.N. mediators appear increasingly pessimistic about the prospects for a resolution in Libya. For several years, U.N. mediators have sought to broker eastern and western Libyan concurrence on a roadmap consisting of uniting their separate administrations into one governing body, and holding nationwide elections for a president and a unified parliament. However, reflecting the stalemated diplomatic process, Stephanie Khoury, the head of the U.N. mission in Libya, told the U.N. Security Council on August 20: “In the absence of renewed political talks leading to a unified government and elections, you see where this is heading—greater financial and security instability, entrenched political and territorial divisions, and greater domestic and regional instability.”
The difficulty mediators have faced in brokering a resolution between Libya’s rival governments resembles the challenges diplomats have faced in resolving conflict and curbing the rise of non-state actors in several of Libya’s neighbors. In neighboring Sudan, Saudi Arabia, the United States, European, African, and other Arab state mediators have failed to broker more than brief ceasefires in the war between the Sudan Armed Forces and the paramilitary Rapid Support Forces (RSF) that broke out in the spring of 2023.
In Yemen, U.S., U.N., and regional mediators, particularly the Sultanate of Oman, have repeatedly failed to forge a settlement between the Houthi movement (Ansarallah) and the U.N.-recognized but politically marginalized Republic of Yemen Government. The lack of a resolution between the Houthis and the Government has provided Iranian leaders with what they perceive as justification to provide the Houthis with increasingly sophisticated weapons technology such as ballistic and cruise missiles and armed drones. The Houthis have used this weaponry to emerge as a significant non-state actor that is challenging the U.S and other world powers by attacking commercial shipping transiting the Red Sea as long as Israel’s offensive against Hamas in the Gaza Strip continues.
In Libya, no militia has, to date, emerged as a threat to global commerce or regional stability to the extent the Houthis have in Yemen. However, one group in particular, the Libyan National Army (LNA) of eastern Libya-based strongman General Khalifah Haftar, has been reportedly receiving progressively sophisticated arms provided by an array of regional and global powers, including Russia, the United Arab Emirates (UAE), and neighboring Egypt. He has also placed some of the military bases he controls at the disposal of both Russia and the UAE to facilitate arms shipments to the RSF in Sudan. At the same time, Haftar’s rival, the U.N.-backed government in Tripoli and allied militias were able to thwart Haftar’s attempts to capture Tripoli and consolidate his control over the country in 2019-2020 with the help of armed drones and armor supplied by Türkiye.
The political divisions in Libya have served as an arena for the regional actors to advance divergent agendas and try to undermine each other by proxy. Egypt and the UAE have backed Haftar in part because of his staunch anti-Islamist ideology that opposes the reliance of the Tripoli government on militias linked to the Muslim Brotherhood movement. Türkiye, by contrast, has engaged regional Muslim Brotherhood-inspired movements and views Haftar as a right-wing figure dedicated to reducing Ankara’s regional influence. Russia, for its part, sees Haftar’s control of most of Libya’s oil fields as a tool in Moscow’s global competition with the United States and its European partners, all of which are backing Ukraine.
Domestically, Haftar and his Tripoli rivals have sought to control state resources as a means of outflanking each other strategically. The battle erupted again on Monday, August 26, when a Tripoli government delegation attempted to take over the offices of Libya’s Central Bank. Under applicable U.N. Security Council resolutions, the Bank is the only legally-recognized depository for Libyan state oil revenues. About 95 percent of Libya’s state budget is dependent on those revenues, meaning that whoever controls the Bank and other institutions that oversee it can exert essential control over the economy.
The attempted takeover of the Bank represented an effort by Tripoli to implement its declared replacement of Central Bank Governor Sadiq al-Kabir, a Haftar ally, arguing he mishandled the country’s oil revenues. A week earlier, Tripoli announced it had appointed Mohamed al-Shukri as Bank governor. However, Kabir, governor of the institution since late 2011, and with Haftar’s backing, refused to step down and Tripoli’s nominee, Shukri, turned down the job offer, rejecting “any bloodshed between Libyans on his behalf.” Failing to succeed to gain control of the Bank peacefully, the Tripoli government raid of the Bank offices reflected its attempts to use a modest amount of force to gain control of the institution and its financial resources. The rival attempts to control the Central Bank triggered militias to mobilize on both sides, although it did not appear that any actual armed clashes have taken place.
Yet, even though no Libyan faction claimed they sought to deliberately harm global commerce or the world economy, as the Houthis in Yemen have done through their attacks in the Red Sea, the escalation of Libya’s political crisis nonetheless introduced new world economic risks. On August 28, Haftar’s allies in eastern Libya sought to shut down the country’s oil production entirely until Tripoli relented on its attempt to replace the Central Bank governor. Libya produces about 1.2 million barrels of crude oil per day, and Haftar’s demands reduced production by about 500,000 barrels per day – adding to 300,000 barrels per day in production shut down earlier by the dispute. Oil engineers said Libya’s Sarir field had almost completely halted its 209,000 barrel per day output as a result of the threats. However, some accounts suggested the production disruption was either less extensive than feared, or temporary, and world oil prices largely shook off the Libya crisis. Helping keep prices from a sustained spike were market forces predicting a global economic slowdown.
Experts assessed that, if the world oil market were in a period of greater supply constraints, the Libya unrest might have had a more significant effect on prices. Some speculated that Moscow has purposely urged its ally, Haftar, to undertake actions to spike global energy prices, in an effort to harm the West economically as retaliation for supporting Ukraine. Whether or not Russia is instigating unrest in Libya, the escalation of tensions in Libya demonstrated the ability of non-state actors in the region’s intractable political disputes to take actions that potentially produce an outsized effect well beyond their countries’ borders. These ongoing crises also illustrate the limitations that existing diplomatic processes and forums face in regional conflict resolution.