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EXCLUSIVE: Nato arrests Libya-bound oil tanker

Pressure increases to stop lifting of Ras Lanuf crude cargo; Ghanem in Vienna; TNC "to attend Opec meeting"

Nato this morning detained a tanker in Malta that was due to ship fuel from Italy to a port in western Libya, a senior Libyan source told Petroleum Economist. The Jupiter was destined for a port within the Qadhafi-held east and the well-placed sourced said it was carrying 12,750 tonnes of gasoline for use by the regime's military forces. 


A Nato official told Petroleum Economist that the ship was boarded "and told it cannot deliver its gasoline because fuel is being diverted to regime forces". He added that the ship was now at anchor off Tripoli awaiting instruction from its owner.

Nato response

Nato added: "It is the Qadhafi regime which is depriving its own citizens of vehicle fuel by diverting reserves for military use. Nato naval forces can deny access to vessels entering or leaving Libyan ports if there is reliable intelligence to suggest that the vessel or its cargo will be used to support attacks or threats on civilians, either directly or indirectly."

And for the first time, Nato said UN Resolution 1973, which authorises military action to protect civilians from harm, could now cover the supply of fuel to the regime.

"UNSCR 1973 authorises all necessary measures to protect civilians and preventing the use of fuel for vehicles attacking civilians is within the mandate," Nato said.

A second vessel, the Cartagena, is still thought to be heading from Turkey to Zawiyah, in western Libya, carrying 42,000 tonnes of fuel for the regime. The source said it had been told to sail well south of Malta, amid fears that its cargo may also be interdicted. Although the tanker's bill of lading states Tripoli, Lebanon, as its destination, the cargo is heading for Libya.

Supplying the regime

The move indicates a tightening of Nato’s efforts to prevent Muammar Qadhafi’s regime from importing fuel. It comes after Petroleum Economist, using intelligence from within Libya, revealed efforts by European and Middle Eastern traders to supply the regime.

But Petroleum Economist has also learned that another vessel, the Samraa Al-Khaleej, has been instructed to sail to Ras Lanuf to lift 600,000 barrels of Amna crude. The 248 metre vessel, flying under a Libyan flag, is due to reach Ras Lanuf this evening. Petroleum Economist could not independently confirm the Samraa Al-Khaleej’s location using ship-tracking services, suggesting its transponder has been switched off.

Importing fuel, which is growing increasingly scarce in western Libya, and selling crude has grown critical for the Qadhafi regime. While Vitol, a Switzerland-based trader, has shipped at least 11 cargoes to the rebel-held east since 6 April, the west has relied on supplies through the Tunisian border. Under pressure from Nato governments and with help from civilians sympathetic to the rebellion in Libya, Tunisia has clamped down on that trade.

Prices for fuel in Tripoli are now almost 50 times the price in the rebel stronghold of Benghazi.

Although oil production in Libya is thought to have entirely ceased, Qadhafi’s regime has between 3.6 million and 4 million barrels of crude in storage, held in tanks in Ras Lanuf, Sidra and Mellitah, close to the 120,000 barrels a day Zawiyah refinery, according to sources in Libya and within one of the Western governments involved in the Nato campaign. Only the crude held in Mellitah can be sent for refining to Zawiyah, where operations continue, according to military-intelligence sources.

Desperately seeking traders

The regime has spent recent days seeking traders willing to lift some of this crude, although it is unclear how payment for the oil can be made in light of US sanctions against Libya. The dinar is non-convertible, making transactions in dollars difficult without recourse to an international bank that may be exposed to US jurisdiction.

Although large trading houses have been reluctant to deal with Tripoli since the rebellion began on 17 February, US and EU sanctions against the regime do not prohibit selling fuel to the west of the country, say legal experts.

Nor do EU sanctions – which put specific individuals and companies on a banned list – include state-owned General National Maritime Transport (GNMTC), which is controlled by Muammar Qadhafi’s son Hannibal. GNMTC is co-ordinating the supply of fuel to the regime.

Putting a blanket ban on such trading with the regime would need the approval of the UN Security Council, said one senior UK government official. But China and Russia, already critical of Nato’s action in Libya, would prevent that.

Under the existing UN Resolution 1973, stopping fuel from reaching western Libya would require proof that it was being used to endanger civilians. That would require a wide interpretation of the resolution, says Elizabeth Wilmshurst, an international law expert from the Royal Institute for International Affairs.

Act of war

Stopping a ship in international waters or within Libyan maritime territory “could be considered an act of war”, according to Martijn Feldbrugge, a sanctions expert at Business Sanctions and Consulting Nieuwediep.

While Nato's arraignment of the Jupiter in Malta suggests a more aggressive strategy by the coalition, the EU is also considering a tightening of its own sanctions against fuel supplies, although some countries with business interests connected to the GNMTC are reluctant, according to a senior source with knowledge of the process. One solution may be to ban from EU ports any tanker that loaded at a port under Qadhafi control.

Preventing fuel supplies to the regime rests on assumptions that gasoline shortages could hamper Qadhafi’s military, or trigger an uprising in Tripoli by locals.

Such a strategy could yet backfire, Shashank Joshi, a military expert and associate fellow at the Royal United Services Institute in London, said. “Fuel shortages will hurt the civilians in Tripoli first, not the military. The anger that causes may not be directed at the regime but at Nato.”

The army may also need much less fuel than thought.

“It isn’t a 1940s-style north African military campaign,” Joshi said of the conflict between rebels and Qadhafi forces in the centre of Libya. “It is a much more static war.” Fighting in cities such as Misrata, he said, involved urban warfare consuming relatively little fuel. With Libya’s air force grounded by the no-fly zone, the fuel needs are less by “an order of magnitude”, Joshi added.

Nato’s action against the Jupiter suggests that the organisation disagrees. The Transitional National Council (TNC), the rebel government based in Benghazi, has been lobbying Nato and western governments with its argument that fuel supplies are lengthening the war and enhancing the Qadhafi military’s capabilities.

End the supply of fuel, said the source, and the war will end quickly, too.

Signs of chaos

Meanwhile, other signs are emerging of chaos within the regime, leading some analysts to speculate that the sale of Libyan crude on the Samraa Al-Khaleej is a transaction that will enrich individuals in control of the stored oil – but do nothing to stop the disintegration of the Qadhafi regime.


Three different sources confirmed that Shokri Ghanem, chairman of Libyan National Oil Company, is now in Vienna, although no-one has confirmed that his exit from the country is a defection.

Ghanem is said to own a house in the Austrian capital, where he has repeatedly represented Libya at Opec meetings, and is thought to hold citizenship in the country. A TNC source also claimed that Ghanem holds Italian citizenship.

“I don’t expect him to say anything,” said an analyst who knows Ghanem, but spoke anonymously. “He’ll just hope to disappear.”

The analyst also said that Ghanem may have been spooked into leaving Libya by the International Criminal Court (ICC) issuing arrest warrants for Qadhafi and two other senior regime officials on 16 May. Ghanem is a former prime minister of Libya, “and mentor to Saif al-Islam”, who is also subject of an ICC arrest warrant, said the analyst.

But a western government official involved in his country’s Libya strategy said he thought a charge was unlikely to be laid against Ghanem. The third warrant is for Abdullah Al Sanousi, head of Libyan intelligence.

TNC set for Opec

Ali Tarhouni, the TNC’s finance minister and the man who may replace Ghanem if Qadhafi falls, intends to represent the rebel east at the Opec meeting in Vienna next month. Qatar is the only Opec member to have recognised the TNC as the legitimate government of Libya, although fellow-member Kuwait has pledged money to support the rebels.

Opec declined a request for comment, although it is understood that the group will not recognise the TNC unless the UN does so first. 

 Read more of Petroleum Economist's exclusive Libya coverage here

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