How Qaddafi is blackmailing oil markets

Push me too far, and I’ll push global oil prices through the roof, seems to be the message of Col. Muammar Qaddafi as he launches the first strikes on Libya's oil assets.

By , Staff writer

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    A Libyan rebel refuels his vehicle at a gas station on the main road leading to the eastern town of Ras Lanouf, Libya Thursday, March 10. Muammar Qaddafi's forces pushed rebel fighters from the strategic oil port of Ras Lanouf on Thursday, driving the opposition from the city with artillery fire.
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After a month of avoiding damage to his nation's oil infrastructure, Libyan leader Muammar Qaddafi's decision this week to drop bombs close to oil facilities – whose export revenue he clearly covets – appear to be something of a warning shot to foreign governments as much as the rebels themselves.

Push me too far, and I’ll push global oil prices through the roof, seems to be his message. Over the years, Colonel Qaddafi has skillfully used the European and American thirst for his oil fields – Africa’s richest – to reduce international pressure on his government for its use of summary executions and torture.

Qaddafi’s planes hit an oil tank at the Sidra export terminal yesterday – the first strike on the country’s oil assets – and dropped bombs today close to the natural gas petrochemical complex at Brega, about 60 miles further east. This strategic region in central Libya, known as the Gulf of Sidra region, has traditionally been the hub for 77 percent of Libya’s energy export revenue, according to Stratfor Global Intelligence.

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IN PICTURES: Qaddafi burns oil pipelines in Libya

“A successful attack on Brega could be a disaster,” says a Libyan oil engineer, who asked not to be named. “The gas pipeline from there supplies almost all of the power plants in the east, and a lot of the ones to the west.”

At Brega, most of the tanks holding highly flammable material like ammonia and ethylene were emptied at the start of the uprising, and some gas was simply burned off, by concerned managers.

An official at the Brega petrochemical complex, who had been welcoming foreign journalists in recent days, refused a meeting today to discuss the country’s oil infrastructure.

About five officials at the complex were kidnapped by Qaddafi’s forces for supporting the demonstrations against his rule that began on Feb. 15, and their whereabouts are still unknown. Qaddafi and members of his military forces have vowed to hunt down and kill all of the leader’s “enemies.”

Though the official didn’t explain his refusal, many Libyans are hedging their bets as Qaddafi’s forces counterattack along the eastern front and continue to push the rebels from the oil town of Ras Lanuf, which is about six miles east of Sidra (the nation's second-largest oil export terminal) and few miles west of one of Libya's largest refineries.

Libya produces approximately 1.8 million barrels of crude oil per day, with most of it going to Europe, according to Texas-based Stratfor Global Intelligence. Approximately 15 percent of Italian energy giant ENI’s total global output comes from Libya, according to the intelligence unit.

IN PICTURES: Qaddafi burns oil pipelines in Libya

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