Wednesday, a Liberian-flagged tanker sailed out of Libya’s northeastern port of Marsa al-Hariga carrying one million barrels of oil. At spot prices, this means the cargo is worth $100 million. This represents a significant milestone for the anti-Khadafy forces based in and around Benghazi in the east (formerly known as Cyrenaica). Symbolically, this provides greater legitimacy to the would-be regime. In more practical terms, $100 million will buy a lot of arms, food and other supplies in the cash-and-carry business that is the international arms trade.
Qatar, which has recognized the rebel leadership as the government of Libya, is helping to market the oil. A new bank account has been established to receive the funds, and Mustafa Gheriani, speaking on behalf of the rebel leadership, said, “We will use the money to buy food, medicines and weapons. We are now producing from 100,000 to 130,000 barrels of crude a day and we hope, under the new deal with Qatar, to increase the output to 300,000.” That would mean $30 million a day.
The EU has accepted the legality and practicality of buying oil from the rebels. Michael Mann, spokesman for the EU’s foreign affairs chief, Catherine Lady Ashton, stated, “If the revenues don’t reach the Khadafy regime, we have no issue with commercial dealings in Libyan oil and gas and they should be regulated by normal trade practices.”
Despite the freezing of his assets, Colonel Khadafy still holds a financial advantage over the rebels. However, this shipment will start to balance the equation. Moreover, the oil trade is a zero sum game for the two factions – what one sells, the other cannot. Not only does this shipment add $100 million to the rebel war chest, it also denies $100 million to the colonel.