Security Briefs

• Diplomatic negotiations lead to ceasefire breakthrough
• Meanwhile, buying time, Russia and Egypt double down on support for Haftar
• And Erdogan turns Tripoli alliance into centrepiece of foreign adventurism as tensions increase in the eastern Mediterranean

International diplomatic efforts intensified through July and August, culminating in Tripoli and Tobruk both separately announcing ceasefires on 21 August as part of a U.N.-brokered peace process with heavy U.S. support. The process which culminated in the 21 August ceasefire proclamations began to gain momentum in mid-July and emerged from a U.N. process to address the two main drivers of the current round of conflict, Tripoli’s control over the Central Bank of Libya and Tobruk’s control over oil revenues. For the past 12 months Tripoli has been increasingly restricting eastern banks’ access to U.S. dollars, and in return Tobruk’s forces had cut off oil exports from the fields it controls in the east in January 2020. Our sources indicate that the announcement of ceasefires by the two sides followed secret agreements to allow eastern banks access to U.S. dollars again and the resumption of oil exports. Yet, simultaneously, the rival Tripoli and Tobruk-based administrations have been rallying military support, setting the scene for a potentially devastating fight over the city of Sirte when and if the current ceasefires break down, which will happen in the absence of a workable long-term solution.

Buying time, Russia and Egypt double down on support for Haftar Over the spring, Russia sent 14 MiG-29s and some SU-24 bombers to bolster Haftar’s forces, likely piloted by third country airmen. Preparing for a major confrontation in Sirte, Russian forces have apparently started fortifying the town with mines, deploying SA-22 anti-aircraft systems and light armored vehicles. Social media has been awash with rumors of a Russian S-300 high altitude air defence system being deployed at Al Jufra, an important LNA air base south of Sirte, although photos purportedly showing the deployment may actually show the system in Algeria (the supposedly Libya-deployed systems have the same camouflage scheme as those belonging to the Algerian army). Russia has also deepened its economic interests in the conflict, deploying Wagner Group paramilitary forces at Es Sider, Ras Lanuf and Zueitina oil export terminals, reported 12 July by the National Oil Company (NOC). This apparent “oil grab” has raised the prospect of more sanctions on LNA figures from the U.S., including Haftar himself, who is thought to own properties in the U.S. worth around $500,000. Notably, the shut-in oil fields, which on paper are operated by the NOC, have numerous international oil companies, including American firms, present on the ground. On 6 August, the U.S. Treasury sanctioned a Libyan company accused of smuggling oil and drugs into Malta, almost certainly a warning aimed at General Haftar. As in Syria, Russia will likely be undeterred by the impact of sanctions on their allies. In the event that Moscow makes concessions Haftar has growing support from Egypt, where President Sisi has been courting the support of east Libyan tribes. Indeed, the idea that the GNA could march into east Libya is unthinkable in Cairo.

Erdogan turns Tripoli alliance into centrepiece of foreign adventurism As Russia and Egypt consider options, Turkish military cargo aircraft continue to reinforce the Government of National Accord (GNA) with equipment. On 27 July, pro-Turkey media outlet TRT World broadcast from GNA frontline positions, showing expanses of table top flat terrain. The area, which includes small towns such as Abu Ghrein, will be familiar to many Misratan GNA commanders, who retook the town and Sirte from the Islamic State (I.S.) in 2016. Sirte is only 90 minutes’ drive away from Abu Ghrein. Opposing the GNA build up, LNA fighters include Kaniyat militiamen now displaced from their former stronghold (and hometown) Tarhuna. The GNA will no doubt want to capture these men, accused of bloody purges of anyone suspected of GNA sympathy. The GNA are also thought to have at least 3,800 Syrian fighters in their ranks. Turkey may be satisfied with a frozen front line, at least for now. Ankara may be content to turn Tripoli into a rump client state: Turkey’s Mediterranean expansionism, which includes sending drilling ships into the Cypriot exclusive economic zone, was cemented in agreement with the GNA on maritime boundaries. In Tripoli itself, Turkey is planning a reconstruction push. On 14 August the Turkish Independent Industrialists and Businessmen's Association announced that 184 Turkish funded projects were planned for Tripoli, worth $16bn. The scale of such ventures is ambitious but cannot be ruled out, given Erdogan’s penchant for ideologically driven foreign adventurism. But even a “frozen” frontline can quickly descend into violence: On 12 August, the LNA reported it had struck a convoy of GNA fighters who were moving towards Sirte with an airstrike.

Oil revenue collapse raises stakes for foreign backers If forthcoming, an influx of reconstruction money in Tripoli would have to be met by a similar surge in funds from Haftar’s backers to rebuild the east. But no reconstruction drive in either Tripoli or Benghazi can resolve the country’s fundamental divisions.

The oil export terminal blockade in the east has cost the country over $8bn, according to the National Oil Company (NOC), revenue that was being distributed through the Central Bank of Libya (CBL) to the rival administrations since 2014. In June, revenues were just $46 million, the lowest on record. If continued, the country’s annual revenue would barely surpass $500 million from an annual high of $20bn. Talks are ongoing for a deal on revenue disbursal, which might involve sending revenues to three regional banks in Libya rather than the CBL in Tripoli, which the U.N. believes may hold tens of billions in currency reserves. The NOC has insisted any disbursal of revenues will be done “under the supervision of the UN and the US.” At the current time, east Libyan salaries have been delayed due to an ongoing cut-off of transfers from the CBL (Tripoli still pays some expenses through the CBL). On 25 July however, the Tobruk administration’s Undersecretary of Finance Emraja Ghaith announced a forthcoming electronic salary disbursal plan which would cover “the whole country,” possibly hinting at a potential peace agreement. Libya’s oil setback has become the great hope for industry stakeholders, since the drop in potential production, now over 1.2 million barrels, is helping diminish colossal oversupply; now that the LNA oil blockade has been lifted the NOC estimates as much as $1bn in capital expenditure will be needed to restart shut-in production.

We now face the prospect of a “frozen peace” at Sirte, with both sides re-arming. Even with an agreement on oil revenue disbursal, there is no guarantee revenues would not be spent on weapons. There is also the risk that the rival power bases of Tripoli and Benghazi could descend into infighting, as Haftar’s grip weakens and Tripoli militias clash over the spoils of reconstruction. The best hope now for peace to continue in the mid to long term is strong coordination among international actors to pressure both sides into not only abiding by the ceasefires, but also building long term arrangements between the sides that could lead to a federalized nation state and eventually to disarmament. If the badly coordinated EU arms embargo is anything to go by, the prospects for this are dim.