Oil Prices Spike After Power Struggle

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Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Islamists massacre civilians in Burkina Faso, Gabon forbids holidays for government officials, and Formula 1 considers holding a race in Rwanda.

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Libyan Central Bank Dispute Shuts Down Oil Production

Global oil prices jumped more than 7 percent Monday amid increased rivalry between competing governments in Libya—which has Africa’s biggest crude oil reserves.

The country is split between a Turkey-backed and U.N-recognized government based in the capital, Tripoli, and a rival eastern administration led by warlord Khalifa Haftar, who heads the self-proclaimed Libyan National Army supported by Russia, Egypt, Saudi Arabia, and the United Arab Emirates.

Libya’s eastern government stopped all oil production and exports on Monday as it vied against its Tripoli-based rival for control of the central bank and crude oil revenues. Nearly all of the country’s oil fields are in eastern Libya.

The Tripoli-based government wants to replace Haftar ally and central bank governor Sadiq al-Kabir due to accusations that Kabir mishandled oil revenues. Last week, it appointed Mohamed al-Shukri as governor of the bank. Kabir—the governor since late 2011—refused to step down. Meanwhile, Shukri turned down the job offer, rejecting “any bloodshed between Libyans on his behalf.”

On Monday, a Tripoli government delegation attempted to take over the bank’s office. Osama Hammad, the prime minister of the rival eastern-based government, declared a “force majeure” on all oil fields, citing the “forceful” takeover of the central bank.

Under a U.N. Security Council resolution, the central bank is the only depository for Libyan state oil revenues. About 95 percent of Libya’s state budget is dependent on those revenues and whoever controls the institutions that oversee them controls the economy, according to security analysts.

The row has mobilized militias loyal to each side, which have feuded since the 2011 NATO-backed uprising that overthrew longtime dictator Muammar al-Qaddafi.

Behind the scenes, the bank is part of a bigger Russian geopolitical chess game, explains Jason Pack, founder of Libya-Analysis. Maintaining an oil blockade would not change the outcome of how the central bank functions but allows Russia to pursue its national interests in Libya. “This oil blockade has nothing to do with the underlying CBL issues,” Pack told Foreign Policy. It is “an entirely manufactured crisis to achieve larger Russian structural aims … It’s very beneficial for the Russians to do anything to keep the oil off and to harm the Biden administration in the lead up to the elections.”

In June 2020, Haftar’s troops—supplied with Russian weapons and mercenaries—came close to taking Tripoli, but Turkish drones and troops were able to repel them. Turkey sees Libya as a strategic gateway into Africa, where it is vying for lucrative trade control. At the same time, Russia’s support for the eastern government ensures it a shadow control of Libyan oil.

Two months into the Russia-Ukraine war—as the world struggled to replace Russian oil and gas—a Libyan oil blockade was announced over demands that Tripoli-based Dbeibah quit in favor of Fathi Bashagha, the rival prime minister appointed by the eastern government. Dbeibah was accused of misusing state funds with help from the central bank. That blockade ended in July 2022 without either side achieving its goal.

“They were happy to have the oil not on global markets because it would make Russian crude more expensive and it would harm Western European consumers,” said Pack.

U.N. attempts to get the nation to hold elections—originally planned for December 2021—have failed. In April, the U.N. special envoy for Libya, Senegalese diplomat Abdoulaye Bathily, quit the job after 18 months and said his attempts toward forming a unified government “were met with stubborn resistance, unreasonable expectations and indifference to the interests of the Libyan people.”

“In the absence of renewed political talks leading to a unified government and elections, you see where this is heading—greater financial and security instability, entrenched political and territorial divisions, and greater domestic and regional instability,” Stephanie Khoury, the head of the U.N. mission in Libya, told the U.N. Security Council earlier this month. “Unilateral attempts to unseat the Central Bank Governor are met with countervailing attempts to maintain him. Attempts to unseat the Prime Minister and his Government are met with attempts to maintain him.”

Libya’s share of OPEC production was about 4 percent in 2023; the majority of its production goes to Europe. While this is a relatively small amount, that oil cannot be easily replaced, economists warned, and therefore has a profound impact on global oil prices.

Thursday, Aug. 29, to Friday, Aug. 30: Annual meeting of the New Development Bank, established by BRICS members (Brazil, Russia, India, China, South Africa, and four recently added nations), to be held in Cape Town, South Africa.

Friday, Aug. 30: African health ministers conclude a regional meeting of the World Health Organization that began on Monday in Brazzaville, Republic of Congo

Friday, Aug. 30, to Monday, Sept. 2: Regional meeting of the U.N. Convention to Combat Desertification will be held in Abidjan, Ivory Coast, ahead of COP16.

Saturday, Sept. 7: Algeria holds presidential elections.

Burkina Faso attack. Around 200 people are estimated to have been killed in the town of Barsalogho, located in central Burkina Faso, on Saturday by an al Qaeda-linked armed group. Several Burkinabe soldiers are missing after the attack by Jama’at Nusrat al-Islam wal-Muslimin (JNIM).

Burkina Faso’s army had prior intelligence that an attack was likely, and townspeople had been instructed to assist the military in digging trenches meant to serve as a protective barrier against the rebels. They were still digging when the armed group opened fire in what became a mass shallow grave. In videos posted on social media by JNIM fighters, scores of bodies appear to be lying in the trenches alongside shovels. Communications Minister Rimtalba Jean Emmanuel Ouedraogo called the attack “barbaric.”

The Islamist group originally emerged in Mali in 2017 before spreading to Burkina Faso and Niger. Earlier this month, JNIM fighters claimed they had kidnapped two Russian nationals who were in Niger visiting gold mines. So far, Burkina Faso’s coup leader, Ibrahim Traoré, has relied on a civilian force called the Volunteers for the Defense of the Fatherland to stem Islamist insurgencies, but may also—like its neighbor Mali—ask for a large force of Russian mercenaries. A report by the Armed Conflict Location and Event Data Project said mercenaries from the Russian Wagner Group have become more violent in the countries that employ them since the death of the group’s leader, Yevgeny Prigozhin, in August 2023.

Death of Eritrea’s ex-finance minister in jail. Former Eritrean Finance Minister Berhane Abrehe died in prison on Aug. 19 after six years in custody without charge. He’d been jailed in September 2018 after releasing a book in which he described President Isaias Afwerki as a “dictator” who needed to resign. No details on a cause of death were released by officials.

Berhane’s family told the BBC that they had heard of plans to bury him in Asmara Patriots Cemetery, where Eritrean independence war veterans are buried. Isaias has ruled Eritrea without a democratic election since 1991. An Eritrean human rights organization based in the U.K. called for an independent investigation into Berhane’s death. “His detention underscored the continued suppression of freedom of expression and human rights in Eritrea,” the nonprofit body said in a statement.

Gabon’s holiday ban. Gabon’s interim president has restricted government officials to a maximum of one week of holiday leave and barred them from vacationing abroad. Gen. Oligui Nguema overthrew his cousin Ali Bongo in a coup last year on Aug. 30.

The new holiday restrictions were announced on state television. It’s thought that Nguema may be attempting to distance himself from the Bongo family dynasty, which had ruled Gabon for almost 56 years. Bongo and his family were known for taking luxury holidays abroad, particularly in France, where Bongo owned numerous multimillion-dollar properties. Although unlike putschists within the Sahel, Nguema has kept Gabon close to Paris.

This year’s Formula 1 season contains a record 24 Grand Prix events taking place globally, but none will be held in Africa. That could change, as F1 bosses are scheduled to hold meetings with Rwandan officials next month over the potential to stage a Grand Prix in the East African nation. Formula 1 chief executive Stefano Domenicali said Rwanda has shown interest in hosting a race at a permanent circuit that it would build. Rwanda has invested heavily in sports branding through partnerships with European soccer clubs such as Arsenal and Bayern Munich, but it has faced criticism of “sportswashing” its poor human rights record under President Paul Kagame.

An F1 championship has not been staged in Africa in more than three decades—since the 1993 South African Grand Prix. A future race could also be staged in South Africa, since it already has a track. “The time’s 100 percent right. We can’t be adding races in other locations and continue to ignore Africa, which the rest of the world just takes from. No one gives anything to Africa,” the F1 champion Lewis Hamilton told reporters on Thursday.

FP’s Most Read This Week

Nigeria’s state capture? A $13 billion road project in Nigeria is marred by accusations of graft. The 700 kilometer (435 mile) Lagos-Calabar coastal highway is thought to be the most expensive infrastructure project commissioned in the country and when completed, the road will run through nine states.

The project was awarded without a public tender process or administrative input to Hitech Construction, a group owned by Lebanese brothers Ronald and Gilbert Chagoury—longtime allies of Nigerian President Bola Tinubu. For the Organized Crime and Corruption Reporting Project, Chikezie Omeje reports that leaked documents show that Tinubu’s son, Seyi Tinubu, and Ronald Chagoury Jr., the son of Ronald Chagoury, owned an offshore company together in the British Virgin Islands.

The highway contract award now faces a legal challenge by opposition politicians citing a conflict of interest. Tinubu once granted the billionaire tycoons lucrative land in 2007, when he was the governor of Lagos. In 2000, Gilbert Chagoury was convicted of money laundering for Nigeria’s former military dictator, Sani Abacha, and in 2019, Chagoury agreed to pay the U.S. government $1.8 million over allegations that he conspired to route illegal foreign contributions to U.S. presidential and congressional candidates.

Kenyan workers trapped in Lebanon. The Middle East is braced for escalating conflict after an Israeli strike last week hit Hezbollah targets in southern Lebanon. Priya Sippy and Waihiga Mwaura report for the BBC that Kenyan domestic workers say they are unable to leave Lebanon under the kafala system, which means that exit visas must be granted by their bosses despite having a passport. While Kenyan President William Ruto has encouraged Kenyans to take up jobs abroad, kafala jobs have left many Kenyan women open to abuse in the Middle East.

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Oil Prices Spike After Power Struggle

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