Libya Fighting Centers on Oil Fields as NATO Weighs Action

Libyan forces loyal to Colonel Muammar Qaddafi bombarded rebels in control of oil installations in Ras Lanuf after anti-regime forces said they would seek to secure energy fields and infrastructure.

Fighting raged around Ras Lanuf, which has a tanker terminal, storage depot and the country’s largest refinery, as well as in Zawiyah, said Abdel Hafiz Ghoga, a spokesman for the opposition’s transitional national council, who said its forces are in control of the oil instillations. Al Jazeera television also reported that the facilities are held by the rebels.

It wasn’t clear whether Qaddafi loyalists, who took control of the city’s center yesterday, were able to hold their gains. Ghoga said Qaddafi is engaged in “a desperate attempt to get his hands on the oil,” and urged foreign powers to impose a no- fly zone over Libya “very quickly.”

The civil war in Libya is the deadliest conflict to emerge from popular protests across the Middle East inspired by the overthrow of longtime leaders in Tunisia and Egypt. Saudi Arabia, the world’s biggest oil exporter, deployed police in Riyadh today to prevent the wave of unrest from affecting the kingdom. In Bahrain, clashes erupted near the compounds of the ruling family between security forces and protesters, the Associated Press reported, citing witnesses.

Financing War

Oil has risen about 20 percent in three weeks of fighting in Libya, and jumped $3 in 15 minutes yesterday after reports that Saudi police fired at protesters in the kingdom’s Eastern Province. Oil futures, which have reached a 2 1/2-year high this month, pared gains today, dropping 2.1 percent to $100.60 a barrel at 10:45 a.m. in New York, after the earthquake in Japan forced refiners to shut plants.

The Libyan rebels may be seeking control over oil regions to help finance their fight against Qaddafi’s better-equipped conventional forces, said Shashank Joshi, an associate fellow at the Royal United Services Institute in London.

“If the rebels can harness oil revenues, it would certainly reinforce abilities and possibly buy arms on the international market,” he said. The Arabian Gulf Oil Co., Libya’s second-largest state-owned oil company, is trying to raise funds for the uprising, the Financial Times reported on its website, citing an unidentified company official. The company, wholly owned by the National Oil Co. of Libya, is based in rebel-held Benghazi.

‘We Fight Here’

Qaddafi’s son, Saif al-Islam, who has emerged as the regime’s top spokesman, vowed to regain lost territories with a full-scale offensive against the rebellion, which has split the country and killed more than 1,000 people. He said the government would never surrender to the rebels and Western countries will lose if they support the uprising.

“This is our country. We fight here in Libya, we die here in Libya,” he said at a press conference broadcast on Sky television. “The Libyan people will never ever welcome NATO, they will never ever welcome the Americans.”

Qaddafi’s forces yesterday fired mortars on the western city of Misrata, home of the Libyan Iron and Steel Company, which remains under rebel control. Around 54 people have been killed and another 122 have gone missing or been kidnapped, said Reda Almountasser in a phone interview from Misrata today.

Misrata ‘Surrounded’

“Qaddafi’s forces have surrounded the city,” said Almountasser, who comes from one of the biggest families in western Libya. “In general morale is strong and high, shops and restaurants are open and today after Friday prayers a large number of people will go out on the streets.”

The London-based Times newspaper said government forces retook control of the western city of Zawiyah, which had been the rebel outpost nearest the capital, Tripoli. The green flags of the regime were displayed around the central square, scene of the worst fighting, while tanks stood guard. A nearby building showed damage from gunfire and tank rounds, the Times said.

The Red Cross reported a “sharp increase” in casualties in recent days.

The U.S. and its allies have pledged measures to protect Libyan civilians from the violence while displaying divisions over steps such as the imposition of a no-fly zone.

UN Mandate

Some North Atlantic Treaty Organization members have cast doubt on the proposal for a no-fly zone. NATO can’t impose one without a mandate from the United Nations Security Council, NATO Secretary General Anders Fogh Rasmussen said yesterday. Turkey, home to NATO’s eastern air component command headquarters, would only support intervention that was intended to protect civilians and that was led by the UN and backed by other Muslim nations, diplomats told Sabah newspaper.

The Arab League, which will hold an emergency meeting tomorrow, has backed a no-fly zone, while the African Union rejected foreign intervention and said five African heads of state will try to start talks among Libyan factions.

Rebel leaders yesterday won French diplomatic recognition for their Interim Transitional National Council, and a promise of talks with U.S. Secretary of State Hillary Clinton when she visits the region next week.

In Saudi Arabia, police set up checkpoints and searched cars in the center of Riyadh, and helicopters circled overhead. Opposition activists had called for a “Day of Rage” today to demand more democracy in the country, an absolute monarchy, while police and religious leaders have said protests are not permitted. The capital stayed quiet, though there were rallies in the eastern city of Al-Hofuf and the Shiite Muslim village of Awwamiya.

Clashes in Bahrain

In Bahrain, the Associated Press reported clashes between protesters and security forces who used tear gas and fired rubber bullets at tens of thousands of protesters who gathered near the offices and compounds of the royal family in the capital, Manama. The Ministry of the Interior had told citizens not to take part in a march toward the king’s palace in Riffa, saying unrest might inflame sectarian tensions.

Saudi Arabia and other Gulf states yesterday announced a plan to provide Bahrain and Oman, which has also faced popular protests, with $10 billion each over a decade. The aid would be aimed at developing infrastructure and housing, Bahraini Foreign Minister Sheikh Khalid bin Ahmed Al-Khalifa said on his Twitter account.

In Yemen, police opened fire to disperse a protest in the port city of Aden demanding the departure of President Ali Abdullah Saleh, and four people were injured.

To contact the reporters on this story: Ola Galal in Benghazi at ogalal@bloomberg.net; Jonathan Tirone in Vienna at jtirone@bloomberg.net

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

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