This crisis has been brewing for several days, ever since an oil tanker, the Morning Glory, loaded a full cargo of oil at as-Sidra. I have read elsewhere that it was North Korean flagged but FT does not mention this in their article.
In fact, it began last July, when rebels in eastern Libya seized at least four oil terminals there and shut the ports. According to this Wall Street Journal article, oil exports are down by at least a third. WSJ quoted the Libyan oil minister as saying that the Morning Glory had loaded 234,000 barrels of oil, worth about $25.5 million at current prices.
The then-prime minister, Ali Zeidan, threatened violence, saying the navy would destroy the ship rather than let it sail. There were a few reports last night of fighting but the Financial Times story in the most complete so far:
Armed forces loyal to the central government in Tripoli launched an attack on eastern separatists in control of much of the country’s oil supply shortly after the country’s prime minister was sacked and replaced with the defence minister.
Libya’s parliament, or General National Congress, removed prime minister Ali Zeidan from office a day after the autonomy seeking eastern rebels managed to load tens of thousands of barrels of oil on to a tanker named Morning Glory and guide it to sea.
The attempt to export the oil in defiance of central authorities in the capital Tripoli triggered a harsh response by Libya’s parliament, which on Monday authorised soldiers and militiamen loyal to Tripoli to move against eastern separatists and seize three oil terminals under their control. There were multiple reports of fighting and casualties on Tuesday between the two camps in and around the central city of Sirte.
Long frustrated over a seeming inability to control powerful regional militias, Libyan politicians have sought repeatedly for the past three months to remove Mr Zeidan, a 63-year-old former human rights activist.
But it was his seeming inability to grasp control over the country’s vital oil supplies that tipped the balance against him. The parliament dismissed Mr Zeidan with 124 out of 186 votes, a two-thirds majority. It appointed Abdullah al-Thinni, defence minister, as caretaker prime minister for 15 days until a new vote is held, the state-owned Libya News Agency reported.
It is not news that Libya has been very unstable since end of Muammer Gaddafi’s 42-year dictatorship, in an uprising backed by NATO. The Benghazi assassination of US Ambassador Chris Stevens was the first dramatic example of just how weak the federal government in Libya is.
The leader of the eastern rebels is Ibrahim Jathran, who is seeking autonomy for Cyrenaica, the ancient Greek name for the eastern half of Libya. In fact, it was name of the province until Gaddhafi seized power in 1963.
The removal of Mr Zeidan’s government after 16 months in power could lead to further instability for Libya.
However, one western diplomat in Tripoli said: “What is important is that they have reached an agreement which has been lacking in [parliament] for months. Hopefully that is going to bring about a better working relationship between the government and [parliament].”
[Jathran’s] men have sought for months to sell oil stored at containers along the coast. Despite threats of military action by Mr Zeidan’s government, the Morning Glory has managed to make its way north into international waters, the diplomat said.
One Geneva-based oil trader was told by two sources that the ship, escorted out of port by government forces from the city of Misurata, broke its cordon and sailed into international waters. Libyan officials also said the tanker was badly damaged.
The fate of 230,000 barrels of crude aboard the ship remained uncertain. Oil traders said that as of late on Monday, the oil had not been sold to anyone.
Note: I have quoted and written at length since both WSJ and FT have reader restrictions. The financial press follows Libya closely because of the oil.