(Bloomberg) -- More than a decade after the US, European and Arab governments helped Libyans overthrow their tyrannical ruler Moammar Al Qaddafi, a lasting peace remains elusive. The country is split between two governments, with disputes running the risk of spiraling into violence. In mid-August, one government’s ousting of the leadership of the central bank, custodian of the OPEC nation’s vast oil wealth, sparked a new standoff and an order by the rival government to halt crude production, which roiled global energy markets.
1. What lies behind the years of turmoil?
Libya’s state institutions crumbled during Qaddafi’s 42-year rule, and his overthrow left a vacuum that was filled by myriad militias, many based on tribal affiliations. A division emerged between the country’s wealthier west and the east, which is home to much of the nation’s oil production. Following elections in 2014, Libya was split in half, with a UN-recognized administration based in Tripoli, the capital in the country’s west, clashing with military commander Khalifa Haftar and a coalition of troops and irregular fighters known as the Libyan National Army in the east. An internationally brokered cease-fire in October 2020 led to a new transitional government under Prime Minister Abdul Hamid Dbeibah, who was supposed to lead the country into a democratic vote the following year.
2. What happened to that plan?
Before too long, the name of Dbeibah’s Government of National Unity began to seem ironic. After a flurry of legal disputes over controversial candidates, including a son of Qaddafi, the promised election failed to happen, and Dbeidah stayed on as prime minister in Tripoli. That rekindled resentment over the continued domination of the country’s west, prompting eastern parliamentarians in 2022 to declare their own Government of National Stability backed by the forces of Haftar, who had coveted the presidency. The division has festered since. While outright violent clashes have been limited, there have been periodic tussles over management of the country’s assets, notably the state-run National Oil Corp.
With no clear timetable for elections, Dbeibah — who eyed a presidential run in 2021 — has been cementing his control over both Tripoli and the crucial energy sector, exacerbating tensions with the east. He reestablished the oil ministry in 2021 to achieve greater oversight of the National Oil Corp. — a situation that culminated with the firm’s long-standing chairman being ousted at gunpoint the following year after refusing to enact ministerial decisions. The management of Libya’s oil has been beset by uncertainty ever since, with officials subject to abrupt suspensions and investigations of conduct.
3. What sparked the latest conflict?
Libya sits atop Africa’s largest proven oil reserves and has pumped 1.2 million daily barrels for much of the past year, making the central bank that manages the revenue an important prize for Libya’s rival administrations. A long-running feud between its governor, Sadiq Al-Kabir, and Dbeibah erupted into the open in mid-August when authorities in Tripoli ordered a complete change of management then forcibly took control of the bank. Al-Kabir, who’d led the bank since 2011 and was facing criticism over his management of funds, called the move illegitimate. He’d fostered ties with eastern Libya, and the region’s parliamentary speaker, Aguila Saleh, warned that “oil revenues wouldn’t flow to untrustworthy hands.” On Aug. 26, the eastern administration said it was suspending the production and export of all Libyan oil in response to Al-Kabir’s ouster, which Haftar has called illegitimate.
The standoff came after a period of building tensions. Earlier in August, when the country’s largest oil field, El-Sharara, suspended output, Tripoli characterized it as an act of “political blackmail” on the part of unspecified forces. Oil stoppages are frequently used in Libya to make political demands. El-Sharara has been closed at least 28 times since 2011, according to Verisk Maplecroft, a risk consultancy.
Mobilization by armed groups has also jangled nerves. Haftar’s son Saddam has moved troops toward the southeast, an area officially under Tripoli’s control, while Dbeibah unified Tripoli’s militias and security agencies into a single police force charged with securing the capital. The UN’s top Libyan envoy said Aug. 20 that the political, military and security situation had “deteriorated quite rapidly” over the previous two months.
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