CAP: Obama should pressure the oil industry to assert its influence with Libya

A ThinkProgress cross-post. See also the Center for American Progress (CAP) post “How the United States Can Respond as Tripoli Heats Up,”

As Col. Muammar Qaddafi begins to lose control of his country to anti-government protesters, the Libyan dictator announced this week that he won’t go down without a fight. In a rambling speech on Tuesday, Qaddafi vowed to track down and kill protesters “house by house.” “I will fight on to the last drop of my blood,” he said. In fact, forces loyal to Qaddafi launched a counter offensive yesterday, and to date, the unrest has already claimed hundreds “” if not thousands “” of lives.

President Obama condemned the Libyan government for of using violence to quell demonstrations and said he asked his team “to prepare the full range of options that we have to respond to this crisis.” But unlike with U.S. allies Bahrain and Egypt, the White House has limited options to assert much leverage with the Libyan government. While some rights groups have offered ideas on how to positively influence the situation, CAP’s John Norris and Sarah Margon note that the White House “needs to convince Libyan business leaders that Qaddafi is a liability they can no longer afford” and since Libya is Africa’s largest oil producing country, a good place to start would be the oil industry:

One doesn’t normally look to oil companies to do the right thing. But they now have an enormous vested interest in helping push Qaddafi out. Libya has Africa’s largest crude oil reserves and the uncertainty in that country has already started to rattle markets. If Qaddafi stays on his current course and remains Libya’s leader, there will invariably be calls for an oil embargo from Libya, a proper U.N. war crimes investigation, and possibly a civil war. The oil business will be disrupted for a considerable period under all of those scenarios.

The situation in Libya “has been the immediate cause for the spike in oil prices recently” and the industry is worried about greater negative effects on the oil markets. But Qaddafi doesn’t appear to be concerned about markets, let alone his own people. In addition to promising all out war with anti-government demonstrators in order to maintain power, he has also reportedly ordered his security forces to institute an if-all-else-fails-slash-and-burn policy “” starting with Libya’s oil, as Time Magazine reports:

There’s been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya’s rebellious tribes: It’s either me or chaos.

While Libya produces only 2 percent of the world’s oil supply, most of its exports go to Europe, which would be directly effected by any more turmoil in the industry. But oil is a world commodity, and the rest of the world, including the United States, is still “addicted to oil” and thus is “not immune to the price shock waves.”


For more about the situation in Libya, see the Progress Report and “How the United States Can Respond as Tripoli Heats Up” by CAP’s John Norris and Sarah Margon.