Qaddafi Forces Strike Oil Ports to Halt Rebels' Advance

Muammar Qaddafi’s forces carried out air and artillery strikes on central oil ports to halt a rebel advance along the coast, while stepping up attacks on towns in the west that have risen up against him.

Troops were within 20 kilometers (12 miles) of Ras Lanuf, the western-most town in opposition hands, the Associated Press said. Warplanes sent from Qaddafi’s home region of Sirte struck the Ras Lanuf refinery, the country’s largest, Al Jazeera television said. Libya’s state broadcaster blamed damage in the town on retreating rebels. Most of the port of Sidra was destroyed and an oil terminal was hit, Al Jazeera said.

Qaddafi “lost control of most of the export outlets when the opposition gained ground in the first week of the uprising. Now he is trying to take back control,” Samuel Ciszuk, senior Middle East energy analyst at IHS Global Insight in London, said today in a phone interview. “If you have a stalemate with nobody controlling any of these facilities, there won’t be any oil exports or revenues.”

The U.S. and its allies are debating ways to stop Qaddafi’s attacks. President Barack Obama and U.K. Prime Minister David Cameron agreed to plan a “full spectrum of possible responses,” including the imposition of a no-fly zone. Rebel leaders say that the grounding of Qaddafi’s planes will help them win the war and end his regime, and the proposal also won backing from Arab nations.

Call for Recognition

Kuwait’s parliament today urged Arab nations to recognize the rebels’ Interim Transitional National Council as Libya’s legitimate government, and withdraw recognition from Qaddafi’s regime.

Qaddafi’s military sealed off and bombarded Zawiyah, about 45 kilometers west of the capital, Tripoli, and the nearest city to fall to the rebels, the AP said. At Bin Jawad, about halfway along the coast, air strikes and rocket barrages stopped the rebels, who pulled back from the town.

The conflict in Libya began as a popular protest movement against Qaddafi’s four-decade rule, of the kind that has swept across North Africa and the Middle East this year. It has evolved into a civil war between armed camps after sections of Libya’s army deserted to the rebels. Libya’s oil output has dropped by about 1 million barrels a day, the International Energy Agency said. The conflict in the country that holds Africa’s largest reserves has pushed oil prices up more than 20 percent.

Crude Rises

Crude increased as action by Qaddafi’s forces bolstered concern that the conflict will persist, further disrupting the country’s oil shipments. Crude for April delivery rose 58 cents, or 0.6 percent, to $105.60 a barrel at 9:19 a.m. on the New York Mercantile Exchange. Futures are up 30 percent from a year ago. Brent crude for April delivery increased $1.33, or 1.2 percent, to $114.39 on the London-based ICE Futures Europe exchange.

Bank of America Merrill Lynch increased its forecast for Brent crude by $36 a barrel and said prices could “briefly” surge above $140 a barrel in the second quarter.

Qaddafi said Western nations are waging a campaign against Libya to control its oil. In a recorded speech aired today on state television, he called on people in the eastern city of Benghazi, the rebels’ stronghold, to “liberate” themselves from the “traitors” forming the opposition’s ruling council and from Islamist fighters from Afghanistan, Egypt and Algeria who he blamed for the uprising.

In a separate interview with Turkey’s state broadcaster TRT shown today, Qaddafi threatened to form an alliance with al- Qaeda, which he accuses of fomenting the revolt in Libya, and disrupting Mediterranean shipping if Western nations take action against his regime.

Flight to Egypt

Libyan Major General Abdul-Rahman bin Ali al-Saiid al-Zawi, the head of the country’s logistics and supply authority, flew to Cairo today with a message from Qaddafi and asked to meet Egypt’s military rulers, the AP reported, citing an Egyptian army official who spoke on condition of anonymity. No further details were immediately available, the news service said.

Rebel leaders in Benghazi, on the eastern end of the Gulf of Sidra, said their supporters are still fighting in Zawiyah, and that the offensive westward along the coast will resume. While Qaddafi’s military has made forays into Zawiyah, they haven’t taken control, Mustafa Gheriani, a spokesman for the anti-Qaddafi rebel fighters, said yesterday in an interview in Benghazi.

‘Terrorist Gang’

State television, citing an unidentified person in Qaddafi’s military, said the “cities in which there are terrorist gangs” are now under army control, with the exception of “some of the gang members” who have barricaded themselves into their houses.

Opposition forces will seek to recapture Bin Jawad after withdrawing from it to Ras Lanuf in the face of reinforced government troops, said Khaled el-Sayeh, a coordinator between the fighters and their ruling council.

Ras Lanuf, which has a tanker terminal in addition to the refinery, has been under sporadic air and artillery bombardment since it was seized by the insurgents last week. Several people were injured in yesterday’s strikes and the city’s water supply was cut off after storage tanks were bombed, Mohamed el Megaryef, a resident of the city, said by phone.

The Ras Lanuf refinery was shut and its employees fled because of the fighting, an official from the Libyan Emirates Oil Refining Co. said today. He spoke before reports of a raid on the facility and calls to his office later weren’t answered.

Talks Rejected

Abdulhafid Ghoga, a spokesman for the opposition council in Benghazi, said yesterday that the United Nations should impose a no-fly zone that would “stop the carnage” and enable the rebels to “liberate the other cities, including Tripoli.” The rebels have rejected negotiations with Qaddafi, who has also ruled out talks.

U.S. Secretary of State Hillary Clinton said a no-fly zone would need international support, and that the decision should be made by the UN not the U.S. Hussein Hassouna, the Arab League envoy to the U.S., said in an interview yesterday that the proposal has Arab support and should be imposed within a week.

The issue of a no-fly zone over Libya will be discussed at a meeting of North Atlantic Treaty Organization defense ministers in Brussels beginning tomorrow, as well as at a summit of European Union leaders the next day.

‘Political Dimension’

“The military capacity is less important right now than the political dimension,” Bastian Giegerich, a consulting fellow at the London-based International Institute for Strategic Studies, said by phone today. “It’s the political dimension which is difficult.”

While the U.K. and France “could take the lead on the political level,” he said, “in terms of military capacity, a lot would have to come from the U.S.”

Cameron and Obama agreed yesterday to plan for “every eventuality” in Libya and work on a UN Security Council resolution, the British prime minister told Parliament in London today without giving details. The two leaders also discussed humanitarian aid, according to the White House.

A convoy of World Food Programme trucks carrying 70 tons of high-energy date bars entered Libya from Egypt yesterday and headed for Benghazi. It’s the first UN humanitarian operation inside Libya, and part of plans to provide food to 1 million people displaced or deprived by the conflict over the next three months.

Assets Frozen

The EU Union and the U.S. have frozen the overseas assets of Qaddafi and his associates, and the Reserve Bank of Australia said today it will implement “targeted financial sanctions against certain key persons” linked to the regime. The EU is “in the process” of widening sanctions to include organizations controlled by Qaddafi as well as individuals, the bloc’s foreign policy chief, Catherine Ashton, said today.

The Financial Times reported that Libya’s central bank governor, Farhat Omer Bengdara, who has been missing for two weeks and may be one of the few Libyan officials authorized to transfer funds, is in Istanbul and it’s not clear where his loyalties lie.

The Libyan uprising followed popular protest movements that ousted Tunisian President Zine El Abidine Ben Ali and Egyptian President Hosni Mubarak. There have also been anti-government demonstrations in Yemen, Bahrain, Jordan, Algeria, Iran, Iraq and Oman, calling for moves toward democracy, action to improve living standards, and the removal of autocratic leaders who have held power for decades.

To contact the reporters on this story: Ola Galal in Benghazi at ogalal@bloomberg.net; Robert Tuttle in Doha at rtuttle@bloomberg.net.

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

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