Libyan crisis to continue

Quoting Al Jazeera and Al Arabiya many western mass media sources actively describe latest events in Libya as evidence of soon finishing of civil war in this country. Liberated from the dictator new Libya is portrayed by many observers as additional source of hydrocarbons for the EU able to quickly restore their exports. According to an IEA spokesperson, it will take Libya not more than two years to reestablish its oil exports and several weeks to restore local production. Companies will return to Libya on new conditions and the European market will only benefit from that, the representative declared. Oil prices eased back on the background of such expectations. Finally, some liberal experts several months ago started speculating about possibilities for new Libya no less than to join the EU.

In reality the crisis in “European and democratic” Libya is just beginning. Civil war between Kirenaiki and Tripolitania is just part of conflict lines in Libya between ethnic and religious groups that will find it difficult to divide power and access to revenues from production of natural resources. War between them will continue with this or that intensity, which makes regular functioning of production and transportation capacities for hydrocarbons rather doubtful even if the West manages to agree with part of Libyan political elites after final collapse of Qaddafi’s regime on guarding the most important facilities of industrial infrastructure by the western military. Besides, there will be serious political questions regarding who the EU and the USA intend to agree to. Will a religious dictatorship (if it is formed at least in some part of the country, which is quite possible considering strong positions of Islamists among the current rebels/insurgents) be a more convenient partner than a secular dictatorship of Qaddafi?

Such considerations make us doubt validity of brisk statements about expectations of inflow of cheap Libyan hydrocarbons to Europe and claims that the market has already taken into account the Libyan factor. It is interesting how the market will react to a quite possible application of this factor onto other countries in the region that are also large suppliers of hydrocarbons such as Algeria where the situation is not much calmer than in Libya in 2010? There is also Saudi Arabia and smaller neighboring nations that are practically openly challenged by Iran that is developing nuclear weapons at a high pace and actively supports the Shiah that claim they are discriminated against by the ruling Sunni monarchies in the Gulf, including Saudi Arabia and Qatar?

By Stanislav Mitrakhovich, NESF leading expert