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Why Tripoli must fall

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Alex Lindsay, E.I.T.


   The only safe outcome for Libya and Libya’s contribution to the international oil market is for Tripoli to fall to General Haftar.

                The absence of any Tripoli based central government control of the oil producing regions of Libya, far from the capital, led to an opportunity for general Haftar to expand his influence by creating and maintaining stability in those areas. The whole country is dependant on those oil producing regions for its foreign income and relies on general Haftar to keep the oil flowing. Once General Haftar attacked Tripoli he effectively lit the bridge on fire behind him and more importantly behind the whole country. If Haftar is defeated in Tripoli and his military capabilities are reduced enough or eliminated then the stabilizing force on the oil producing regions will also likely disappear, creating a vacuum which will be filled by much less pleasant characters waiting for an opportunity to seize control.

                Many people seemed surprised when Trump tweeted out his support for general Haftar, I however was not. Any opposition to Haftar is effectively an opposition to about a million barrels a day of production, production Trump will be relying on when he imposes sanctions on Iran.

                Watch Libya carefully, if Haftar loses then the likely consequence will be attacks by rebel groups on oil installations and a subsequent drop in production or at least a meaningful risk premium on whatever production is maintained. 

Alex Lindsay:

                Alex is an energy industry technical expert with experience in most areas of oil and gas upstream operations and a keen interest in oil market analysis. A civil engineer by education and a driller by passion, always on the look out for grey and black swans in the energy market. The views expressed in any of Alex’s articles reflect the sentiment of his current portfolio.

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spot on analysis Alex. To think all of oil price uncertainty actually started in Libya back in 1969 when Khaddaffi wanted an increase in the oil price by $6, I believe, and all of the oil majors of any consequence said not going to happen, except Hammer at Occidental.  OXY gave in and that gave OPEC the backbone a few years later to raise the prices and even embargo countries during the subsequent wars with Israel and then the Iranian revolution. Libya, with its vast light oil reserves, has and will be a very important geopolitical actor as they have been since WWII. Trump is correct and Alex hit the nail square. 

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The Libyans appear so far to avoid destructive violence in the oil facilities. I saw an article featuring the National Oil Corporation head pleading that the oil revenue is so essential to the economy that the facilities must be spared from violence.  Unfortunately, I can't find that article now.  This article describes probably the worst of the violence so far, and it does not seem to have disrupted production:    https://www.libyaobserver.ly/news/warlord-khalifa-haftar-turns-libya’s-oil-ports-military-sites 

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