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Libya conflict: Rebels move into Tripoli, world and oil markets react

Updated On: Aug 23, 2011

Rebels in Libya now control much of the country's capital, Tripoli, following a NATO-backed offensive over the weekend.

The rebels swept into Tripoli from several directions following an uprising in the capital. They were greeted by jubilant crowds in central Green Square when they arrived on Sunday.

But the euphoria that followed their triumph is giving way to some sense of wariness this week. Colonel Muammar Gaddafi remains at large, with pockets of loyalist forces stubbornly resisting rebel efforts to take full control of the capital.

Gaddafi's son, Saif al-Islam, was previously believed to have been captured by rebel forces, along with other members of his family. But Saif al-Islam has since made public appearances in loyalist-held areas of Tripoli, denying reports of his arrest.

"I am here to refute the lies," he said at his family's compound.

He also visited a hotel where international journalists are staying, claiming that the loyalists "have broken the backbone of the rebels" and that by moving into Tripoli, the rebels had fallen into "a trap".

He also claimed his father is still in Tripoli.

Saif al-Islam is a high profile figure in the Gaddafi leadership, and was widely regarded as a likely successor to his father prior to the unrest.

It was not clear whether he had been in rebel custody and escaped, or was never held at all. His appearance raised significant questions about the credibility of rebel leaders.

Currently, rebel fighters have set up checkpoints in parts of the city, and say reinforcements are arriving by boat from their coastal stronghold of Misrata. The rebels claim they hold around 80 or 90 percent of the capital, but pro-Gaddafi forces continue to insist most of Tripoli is still under their control.

Analysis: Libya conflict: Defiant Saif al-Islam Gaddafi reappears [BBC News, 23 Aug 2011]
Analysis: Qaddafi Rule Fades as Loyalists Fight On [New York Times, 22 Aug 2011]

US President Barack Obama was cautious about proclaiming victory, saying that "the situation is still very fluid...there remains a degree of uncertainty, and there are still regime elements who pose a threat".

"But this much is clear: the Gaddafi regime is coming to an end and the future of Libya is in the hands of its people," he said.

The US President also promised Libya's people that Washington will be "a friend and a partner" as the strife-torn country grapples with the "huge challenges ahead".

Other world leaders have also reacted to the latest developments in Libya.

Announcing a special Libya summit with the heads of the European Union, Arab League and African Union this week, UN Secretary General Ban Ki-moon called on Gaddafi's fighters to "cease violence immediately and make way for a smooth transition."

The Arab League has officially recognised the Libyan rebel government, the National Transitional Council, for the first time. Various countries in the region, including Egypt, Morocco and Iraq have made their own statements on Monday acknowledging the rebels as Libya's new legitimate government.

In Asia, China also joined in the congratulatory statements, saying that it respected the Libyan people's choice in attempting to oust Gaddafi's regime.

A Chinese Foreign Ministry spokesman said China was "ready to cooperate with the international community" in Libya's reconstruction.

Venezuelan President Hugo Chavez, an old Gaddafi ally, was a lone voice of foreign support for the crumbling regime, accusing the West of "destroying Tripoli with their bombs".

Report: World welcomes end of Gaddafi era  [Al Jazeera, 23 Aug 2011]

But even as the world reacts with optimism to an imminent rebel victory, experts are already warning of the difficulties facing Libya's fledgling National Transitional Council as it takes power in the country. Skeptics argue they will be incapable of holding together serious tribal and regional divisions, and political order in Libya may collapse. There are also some concerns regarding Islamic extremists in the country.

One of the key challenges for the new leadership may be building institutions that can redistribute Libya's oil revenues in an equitable fashion.

Analysis: Could Libya split along tribal lines? [CNN, 22 Aug 2011]

Across the world, oil prices fell on Monday amid the prospect of a possible resumption of oil exports from Libya. Brent crude prices slipped by as much as US$3 to almost $106 a barrel at one point on Monday, before rebounding later in the day.

Libya exported about 1.3 million barrels a day until the current conflict began and sanctions against the Gaddafi's regime led to a sharp reduction in output. Oil output is estimated to have fallen to as little as 100,000 barrels per day.

According to a June estimate by the International Energy Agency, a return of Libyan oil production to levels before the unrest (1.7 million barrels a day, or 2 percent of global supply) would take until 2015.

But with the rebel advance into Tripoli, new Libyan supplies to the global market could come sooner than previously expected. Several oil firms, including the rebel-controlled Arabian Gulf Oil Company, have suggested that normal supply could resume much faster once the crisis is resolved.

However, some industry experts are more pessimistic, warning that it could take more than a year for Libya to pump oil at pre-war levels. Libya faces considerable barriers to reviving oil production, including the state of its oil infrastructure, continuing political tension, and the difficulty of re-establishing governance in the country.

Analysis: Rethinking Libya and Oil Prices [New York Times, 22 Aug 2011]
Analysis: Rebel advance in Libya roils global oil prices [Los Angeles Times, 23 Aug 2011]

Over in Syria, the success of the Libyan rebels has emboldened activists opposed to the regime of President Bashar Assad. Thousands of anti-government protesters took to the streets across Syria on Monday, demanding that the Syrian leader step down. Reports say protestors chanted messages like "Gaddafi is gone, now it's your turn Bashar!"

The protests followed a television address by President Assad, who insisted unrest in Syria was being driven by armed gangs and Islamic militants, not reform-seekers. He defended his use of force to suppress revolts, which activists say has left more than 2,000 civilians dead.

In response, British Deputy Prime Minister Nick Clegg said the Syrian leader offered "the same, well-worn promises of reform" and was "as irrelevant to Syria's future as Gaddafi is to Libya's". UN Secretary-General Ban Ki-Moon also accused him of breaking his promises.

Analysis: In Libya's Wake: Pressure Builds on Assad [TIME, 22 Aug 2011]
Report: Assad broke word, U.N. chief says [Washington Post, 23 Aug 2011]







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