Qaddafi's Grip on Power Weakens as Opponents Secure Libya's Oil-Rich East

Libyan leader Muammar Qaddafi reinforced his defense of the capital of Tripoli with tanks as opponents consolidated control of the country’s oil-rich east, a close adviser abandoned him and Switzerland froze his assets.

Forces loyal to Qaddafi moved against cities near Tripoli and more than 100 people were killed in Az-Zawiyah, a town west of the capital, Al Jazeera reported. Rebels appeared to be in control of the entire eastern coastline, the Doha, Qatar-based network reported yesterday, as clashes spread to Sabha in the southwest, and Sabhatha and Az-Zawiyah west of Tripoli.

“It’s a massacre in there,” Egyptian Mohamed Yehia said, describing recent violence after fleeing his home in the eastern coastal city of al-Bayda. A Tripoli resident, who identified himself only as Bashir, told Bloomberg Television that Qaddafi was blocking off access to Tripoli with tanks.

The Obama administration said it was discussing measures against Qaddafi, who remained defiant and blamed the uprising against his 41-year rule on “drugged kids” and al-Qaeda. With the Libyan leader clinging to power and violence deepening, opposition leaders have warned the country could descend into civil war.

“The possibility of civil war only exists if Qaddafi stays,” Mohammed Ali Abdallah, deputy head of the National Front for the Salvation of Libya, the main exiled opposition group, said yesterday. Qaddafi made his comments yesterday speaking by telephone on state television.

Losing Allies

Evidence he was losing allies included the defection to Egypt of a confidante, his cousin Ahmed Qaddaf al-Dam, following resignations by government ministers and diplomats. Army units, particularly in the eastern part of the country, have defected to the opposition.

Crude in New York retreated from the highest level in 29 months on assurances from the U.S., Saudi Arabia and the International Energy Agency that they can compensate for any disruption of Libyan shipments. Crude oil for April delivery declined 82 cents, or 0.8 percent, to settle at $97.28 a barrel on the New York Mercantile Exchange. The contract touched $103.41, the highest intraday price since Sept. 29, 2008.

Asian stocks rose for the first time in five days as the retreat in crude oil costs eased concern the global economic recovery will be derailed. The MSCI Asia Pacific Index gained 0.9 percent to 136.53 as of 3:00 p.m. in Tokyo. Standard & Poor’s 500 Index futures added 0.4 percent.

Libyan Oil

Libya, with a population of about 6.3 million, normally pumps 1.6 million barrels of oil a day, selling most of it to Europe, according to Bloomberg estimates. That’s about 1.8 percent of world supply.

Switzerland froze the assets of Qaddafi and his entourage for three years, the Ministry of Foreign Affairs said in an e- mailed statement from Bern yesterday. U.K. government officials have identified billions of pounds in assets held by Qaddafi in U.K. banks and are planning to freeze them, the Daily Telegraph reported, citing an unidentified official with knowledge of the matter.

Evacuations of foreign nationals continued. Rough seas prevented the departure of a U.S-chartered ferry to take 285 people, most of them Americans, from Tripoli to Malta. The U.K. reported evacuating 350 British nationals and citizens of 25 other countries yesterday aboard planes and a British frigate.

No Direct Contact

Obama spoke yesterday with U.K Prime Minister David Cameron, French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi to coordinate actions against Libya, according to a White House statement. Jay Carney, Obama’s spokesman, said sanctions and other measures “to affect the behavior of the Libyan government” in the near term are being discussed.

Obama is sending Secretary of State Hillary Clinton to the UN Human Rights Council in Geneva on Feb. 28 to meet with other foreign ministers to work on a coordinated response, including a proposal to expel Libya from the UN human rights group. The administration, which has received messages from Qaddafi, has had no direct contact and isn’t seeking to deal with him, State Department spokesman Philip J. Crowley told reporters yesterday.

Venezuelan President Hugo Chavez said Libya is bracing for civil war in his first comments on the unrest following speculation he may grant Qaddafi asylum after years of support. “Long live Libya and its independence,” Chavez said today in a post on his Twitter account.

Blaming Foreigners

Thousands of Egyptians working in Libya fled after Qaddafi’s second-oldest son, Saif al-Islam, this week accused foreigners of inciting the revolt. Popular uprisings are spreading across the Arab world after mass protests in Tunisia and Egypt ousted their two long-serving presidents.

Many of those arriving from Libya said they had seen mercenaries from Africa and elsewhere, some speaking French.

“My brother and cousins have been trying to leave Tripoli for four days, but they’re not able to,” said Nabil Abdel Raouf, 35, an Egyptian construction worker who made it to safety in Egypt. “The mercenaries are in the streets and they’re killing anyone who leaves his house.”

Yehia, 23, said that at first “the police attacked the protesters, but after they saw many of their people being killed, they sympathized and joined them. The army too.”

Death Toll Reports

Italian Foreign Minister Franco Frattini told parliament Feb. 23 there are “credible” reports that 1,000 people have been killed. The violence in Libya quickly surpassed unrest in other Arab countries engulfed by demonstrations, including Egypt, Tunisia, Bahrain and Yemen.

In the east, Qaddafi’s opponents organized committees of civilians to run and defend their cities with the help of troops who deserted his forces. Major General Suleiman Mahmoud, commander of the Libyan army in Tobruk, told Al Jazeera that his forces are siding with local residents.

Qaddafi has led Libya since coming to power in a military coup in 1969, making him the world’s longest-serving non-royal leader.

He “has always been an ‘unusual’ person: erratic, unpredictable and unconventional,” George Lane, a former U.S. ambassador to Yemen who had headed the U.S. Embassy’s office in Benghazi, said yesterday by e-mail. Lane said he met Qaddafi during the 1969 coup. “In some ways he was ‘crazy like a fox.’ Now he sounds like he may be out of control,” Lane said.

‘Rats’ and ‘Cockroaches’

In his speech this week, the Libyan leader called the protesters “rats” and “cockroaches,” warning them to stay off the streets and reading a litany of offenses that would justify the death penalty.

Outside the capital, and in Libyan diplomatic missions around the world, cracks in the regime were widening. More than a dozen Libyan envoys have resigned since the uprising began on Feb. 17, including its chief diplomats to the United Nations and to the U.S.

Saif al-Islam denied on state television yesterday reports that warplanes had been used in attacks. One of his brothers, Saadi, in an interview in the London-based Financial Times, contradicted him, saying ships and aircraft had been used to bombard ammunition depots in Benghazi.

The SITE Monitoring Group, which checks the websites of Islamic militant groups, said Feb. 23 that al-Qaeda’s North African arm, al-Qaeda in the Islamic Maghreb, expressed solidarity with anti-government forces in Libya and urged Muslims everywhere to support the uprising. “We will do whatever we can to help,” SITE quoted the group as saying.

Slow Evacuations

Evacuations have been complicated by the closing of all airports in Libya except in Tripoli. Turkish Foreign Minister Ahmet Davutoglu said that Libya denied requests for extra flights to evacuate Turks from the country, prompting Turkey to begin the biggest sea evacuation in its history. Turkey has repatriated 5,516 of its estimated 25,000 citizens from Libya so far, his ministry said yesterday.

China chartered four passenger ships from Greece and Malta and 100 buses from Egypt to move 4,600 of its estimated 30,000 nationals away from the violence, its Foreign Ministry said.

To contact the reporters on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net; Maram Mazen in Khartoum at mmazen@bloomberg.net; Massoud A Derhally in London at mderhally@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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