p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 14.0px Times; color: #101010; -webkit-text-stroke: #101010} p.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 14.0px Times; color: #101010; -webkit-text-stroke: #101010; min-height: 18.0px} p.p3 {margin: 0.0px 0.0px 10.0px 0.0px; font: 14.0px Times; color: #101010; -webkit-text-stroke: #101010} span.s1 {font-kerning: none} span.s2 {font-kerning: none; color: #347ab7; -webkit-text-stroke: 0px #347ab7} Recent clashes over control of Libya’s oil infrastructure could end up having long-lasting implications for the country’s institutions and political transition. Khalifa Hifter, the commander of the self-styled Libyan National Army (LNA), announced on June 25 that control of oil production in ports under his control would no longer be conducted by the internationally recognized National Oil Corporation (NOC). Resolving this dispute could provide an opportunity for the West to broker an agreement that would protect the country’s wealth and resolve the political impasse.

Due to quirks in Libya’s institutional legacy, those who control the oil fields, pipelines and terminals have never controlled the payments that Libya’s oil fetches on the open market. For the last 45 years, the NOC has been essentially the sole generator of Libya’s exports through its production of crude oil via a complex web of partnerships with foreign firms. Nonetheless, the money that foreign oil companies pay as taxes on their oil sales or shipping firms pay to lift NOC crude is always deposited in and later dispersed by the Central Bank of Libya (CBL). Since strongman Moammar Gadhafi’s ouster in 2011 and Libya’s ensuing transformation into a militia paradise, the militias who control the CBL building and the CBL governor’s ride to the airport have more leverage over how Libya’s oil money is spent than those militias that only control oil infrastructure.

Recent events in Libya’s oil crescent present a deep challenge to this unhappy status quo. On June 14, forces under rogue Petroleum Facilities Guard Commander Ibrahim Jadhran took control of the Sidra and Ras Lanuf oil ports from Hifter’s LNA. Over a week later, the ports were back in the hands of the LNA, only this time, according to Hifter, they are to be administered by the internationally sanctioned Benghazi-based National Oil Corporation (the Eastern NOC) rather than the internationally recognized Tripoli-based NOC, which operates under the Government of National Accord (GNA).

Despite throwing down the gauntlet, there have been no attempts by Hifter-aligned forces to smuggle illicit oil out from the seized Ras Lanuf and Sidra ports, but the last 48 hours have begun to see successful attempts to directly block transactions at other ports under Hifter’s control, like Zueitina and Hariga. Therefore, rather than trying to pilfer Libya’s oil directly, Hifter’s move primarily challenges which institutions and individuals should be considered legitimate recipients of Libya’s foreign currency earnings.