Global oil market analysts are carefully watching the latest news emerging from Africa’s (potentially) largest oil producer. In an unexpected move, Libya’s National Oil Corporation (NOC) stated lifted the force majeure on crude exports from its key terminals. The national oil company indicated that it expects a gradual revamp of production, but emphasizes that overall production levels will be less than 50 percent of its historic highs. The company indicated that significant damage to reservoirs and oil and gas infrastructure in the country, caused by the blockade that has been in place since mid-January 2020, has left a segment of its production at risk. The removal of the force majeure by NOC surprised many observers as the security situation in the country doesn’t appear to be improving. The move has left some analysts wondering if NOC has been able to set up a deal between the UN-supported GNA government and some parts of general Haftar’s LNA forces. Others have suggested that significant pressure from third parties may have forced the two groups to agree to an oil deal. The North African oil producer has seen oil production collapse due to the conflict between the UN-backed GNA and the self-styled Libyan National Army of Khalifa Haftar. Since mid-January, a force majeure was declared by NOC on crude loadings out of the ports of Marsa El Hariga, Brega, Es Sider, Ras Lanuf, Zueitina, and Zawiya. Total Libyan oil production fell to between 70,000 and 100,000 bpd in the past few months, from over 1.10 million bpd before the blockade. Despite the positive news from NOC, optimism about Libyan oil production should be tempered. The situation on the respective oil-producing fields is far from positive, while damage to infrastructure and possible reserve issues are expected to keep production very low in the coming months. NOC also stated that the forced closure of several of Libya’s oil fields has affected the oil reservoir quality, which has undergone mechanical, structural, and chemical changes.
The broader geopolitical situation in which Libya finds itself is another reason for analysts to temper optimism. UN chief Guterres stated that foreign interference in Libya has reached ‘unprecedented levels,’ without directly stating the main culprits. It is looking increasingly likely that we will see a military operation by GNA forces, backed by Turkey, on the Sirte region. Any military action in the Sirte region would be a direct danger to NOC’s future plans, as oil production and exports in the region would likely be halted. The GNA and Turkish officials have openly stated that they are preparing a move against Sirte, currently in the hands of LNA forces, to regain control of the area’s strategic oil reserves. Indirectly Turkey has stated that it wants to regain power over the Sirte area in order to deliver a major blow to Haftar’s LNA and its backers, Russia, UAE, and Egypt. The UN is currently trying in vain to set up a possible political solution for the crisis, but the developments on the ground suggest that there is no political will for such a deal at the moment.
As things stand, two major external forces are on track to clash in a military conflict within Libya. Turkish forces have recently put their full backing behind the GNA, while Egypt has promised the protect Haftar’s forces. Egyptian President Sisi has stated that any violation of Sirte and Al-Jufra will result in direct intervention from the Egyptian military as per international norms. Egyptian Foreign Minister Sameh Shoukry stated that “these threats clearly and currently endanger Egypt, and we will not tolerate these types of threats which are close to our borders, at a time when foreign interference provides those militants with support.”
To show their readiness to intervene, Egypt has held a military drill near the Libyan border called “Hasm 2020”. This drill was a direct reaction to a Turkish statement that the Turkish navy will hold exercises off the Libyan coast. Egyptian defense sources have stated that Hasm 2020 involved Egypt’s Armed Forces’ land, maritime, and air defense. Some analysts expect more Egyptian naval maneuvers near Libyan waters in the coming days. The Turkish Navy said the maneuvers, called “Naftex”, will take place off the Libyan coast, involving 17 warplanes and eight naval vessels. Ankara has reportedly reserved an area for military exercises in the Mediterranean, according to Turkish news Yeni ?afak, slated to be three different regions, named Barbaros, Turgut Reis, and Çaka Bey, off the Libyan coast. On June 11th, Turkish armed forces held a maneuver in the Mediterranean with eight naval ships and 17 fighter jets.
A possible conflict between Egypt and Turkey is now a very real possibility. Such a conflict would likely draw in other forces as Egypt, Israel, Greece, and Cyprus are indirectly involved already. Turkish military moves, including a possible Sirte operation, will need to be backed up by Turkish naval forces. These naval forces would need to go via the maritime areas of the East Med countries, regardless of Libya and Turkey signing a bilateral EEZ agreement. Cairo is unlikely to back down any time soon as Ankara has been supplying armed drones, military advisors, and Syrian mercenaries to the U.N.-recognized GNA. On July 4, Al Watiya airbase, where Turkey had started to deploy some of its MIM-23 Hawk air defense missiles, was attacked by unidentified airplanes. There are rumors that this attack involved Rafale fighters, which would suggest that Egypt is already involved as the country has a large fleet of such fighters. Military analysts clarified that Egypt’s Rafales are equipped with long-range air-to-surface Storm Shadow missiles, able to evade any low to medium-altitude air defenses.
Until now, there are a lot of open questions, but Turkey’s willingness to take part in the Libyan conflict has put it on a collision course with Egypt, the UAE, and possibly even Israel. Turkish Airforce and Navy capabilities are impressive, but Egypt and its partners have a geographic advantage. A significant Egyptian military intervention in Libya would be a litmus test for Ankara’s resolve. In the end, Turkey will have to transport its armor across the Mediterranean while Egypt would just have to drive or fly across the border.
In the coming days and weeks, we will likely see the Libya crisis swing in favor of one of the two major powers. Ankara and the GNA will have to consider the possibility that some European partners and Israel may refuse to sit on the sideline if a military conflict does happen. Further destabilization of Libya and increased Turkish influence in the region would not be to the advantage of France (Total), Italy (ENI), or the littoral powers of the East Med. Whatever happens in the coming weeks, a revival of Libyan oil production and exports is looking extremely unlikely.