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Elia Preto Martini

May 16th, 2022

The Energy Dilemma: Russia, Libya and the EU After Ukraine

1 comment

Estimated reading time: 6 minutes

Elia Preto Martini

May 16th, 2022

The Energy Dilemma: Russia, Libya and the EU After Ukraine

1 comment

Estimated reading time: 6 minutes

by Elia Preto Martini

Libyan militiamen in front of an oil refinery, 2018. Source: Financial Tribune

The Russian invasion of Ukraine impacted several dimensions of Western security architecture, with a pressing issue relating to energy security, due to the high dependence many European countries had on Moscow’s oil and gas exports. As a result, after the beginning of the military operations on 24 February 2021, many governments pushed to find new energy partners, especially in the Middle East and North Africa.

In this process, many observers and policymakers considered the Libyan oil and gas sector one of the most attractive markets, mainly because its production capacity has been under-utilised in recent years due to a lack of investment amidst political turmoil. Nevertheless, Western hopes were shattered some weeks after the invasion due to a series of political upheavals in Libya. To fully understand this situation, it is necessary to take a few steps back.

After the 24 December 2021 elections failed to produce a viable government, the country has been politically divided between the UN-backed government of Abdul al-Dbeibeh, located in the capital Tripoli, and the House of Representatives-designate prime minister Fati Bashagha in the eastern part of the country. In this new political confrontation, old personalities re-emerged, most notably General Khalifa Haftar, who decided to support the Bashagha government.

Recently many Haftar-supporting militias have seized oil terminals and plants, forcing the national state company to reduce its production from 1.3 million barrels per day to about 800,000. The aim is to push al-Dbeibeh to resign and allow Bashagha to move on the capital, Tripoli. While Libya is losing an estimated $60 million per day due to the blockade, al-Dbeibeh refuses to give up power, exacerbating the existing political tensions.

This crisis’ outcomes are, naturally, impossible to predict. However, many Western governments must be concerned about the consequences for their efforts to find new partners able to make up for Russian oil and gas exports, which in many cases account for more than 40% of their national consumption. The invasion of Ukraine has necessitated this disengagement both for moral and strategic considerations, but how to implement such a policy?

Italy, for example, has reached an agreement with Algeria to increase its gas imports to around 31.5 billion cubic meters (bcm), which will offset one-third of what is currently imported from Russia. Still, after the 2011 Arab Spring, many observers fear that the contract may not be respected for an extended period of time, with the possibility of instability of supplies or attempts to change contract conditions.

This case is instructive because it represents a dangerous paradigm that may well characterise future foreign and economic policy – the trade-off between financing a hostile state, Russia, to stabilise energy imports, or diversifying providers with the risk of supply-chain disruption. It is likely that many governments – paralysed by domestic public polarisation and the fear of making too many rash decisions – will try to steer between both paths.

This non-choice could be dangerous: the invasion of Ukraine has demonstrated that self-sufficiency in crucial national security areas is one of the preconditions for conducting a truly independent foreign policy. For this reason, if a trade-off like this is tolerated in the short term, Western countries will still have to develop a longer term plan to no longer depend on Russian – or other countries’ – oil and gas supplies.

Technology improvements and new investments in both renewables (solar, wind, and so forth) and non-renewable (nuclear) energies could be the most decisive weapons against reliance on corrupt or militaristic economies. French President Emmanuel Macron, for example, has already announced the construction of six new reactors in the coming decade, and the German government decided to extend the lifetime of its existing nuclear fleet after the invasion of Ukraine.

This new energy transition rush could also be an opportunity to increase European-Middle Eastern cooperation. MENA oil and gas-rich countries could provide additional non-renewable resources in the short term, while the EU’s superior technological capabilities in the renewables sector could flow to these countries along with foreign direct investment. Each government must adopt a national strategy according to its own economic structure, know-how, available capital resources, and the constraints of public opinion. However, whatever path they decide to pursue and economic resources they chose to focus on developing, the time to start redesigning the future is now.

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About the author

Elia Preto Martini

Elia is a recent Middle Eastern Studies graduate at the Catholic University in Milan with a working background in Italian research centres and think tanks (including OSMED and Ce.S.I.). He currently works as a freelance journalist covering European and Middle Eastern issues. He tweets at @epretomartini

Posted In: Libya

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