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Qaddafi Strikes Oil Targets as Libya’s East-West Split Hardens

Muammar Qaddafi’s forces carried out air and artillery strikes on oil facilities midway along Libya’s coastline as fighting flared across a desert area that is now the east-west dividing line in the nation’s civil war.

Warplanes sent from Qaddafi’s home region of Sirte struck the Ras Lanuf refinery, the country’s largest crude processing plant, Al Jazeera television said. The nation’s largest oil terminal, at the port of Sidra, was hit and part was in flames, Al Jazeera said.

“With the violence escalating, it was a question of time when oil facilities would be drawn into the fighting,” Samuel Ciszuk, senior Middle East energy analyst at IHS Global Insight in London, said in a phone interview. “To dislodge opposition forces, you need to take these facilities. That would entail hitting some.”

Fighting has intensified this week as Qaddafi has sought to turn back rebels’ advances from Ras Lanuf. Oil prices rose in London and declined in New York trading after a strong domestic oil supply report.

The geographic split, with rebels in the east and Qaddafi controlling the west, may result in a partition of the country, said Ryan Crocker, a former U.S. ambassador to Iraq, Pakistan, Syria, Kuwait and Lebanon.

“Qaddafi’s going to hang on,” Crocker said in a speech at CERAWeek, an IHS Cambridge Energy Research Associates conference in Houston. “I’m not sure whether he can hold the country, but I am sure that the insurgents aren’t going to take him.”

Most Wanted Man

In a recorded speech aired yesterday on state television, Qaddafi 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.

Libya’s criminal investigations authority is offering a 500,000 dinar ($407,000) reward for any person who arrests the head of the Benghazi-based rebel council, former Justice Minister Moustafa Abdel Jalil, state television reported.

More than 400 people have been killed and 2,000 wounded in fighting in eastern Libya since Feb. 17, a member of the insurgents’ provisional health committee told reporters yesterday in Benghazi. The official, Gebril Hewadi, said the dead include 350 civilians and 50 rebel fighters, according to regional hospitals. The number of people missing is still unknown, he said.

Qaddafi’s Oil Targets

Mustafa Gheriani, media coordinator for the rebels in Benghazi, said Qaddafi’s forces fired missiles against the oil pipeline that goes to Gulf of Sidra and against the Ras Lanuf port. He said rebel forces are now close to Bin Jawad, a government stronghold west of Ras Lanuf, and predicted that retaking the town will come at a high cost.

“We hope a no-fly zone will be imposed and then it will be easy to regain control of it,” he said.

The U.S. and its allies are debating ways to stop Qaddafi’s attacks. President Barack Obama’s top national security advisers, including Secretary of State Hillary Clinton, met at the White House.

White House press secretary Jay Carney said the administration is considering a “variety” of options, including the imposition of a no-fly zone. Rebel leaders, asking for the no-fly zone, 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.

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

‘Terrorist Gangs’

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. The city is back under government control, the Al Arabiya news channel reported.

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. The government claim could not be verified, since most phone lines have not been working during the military siege.

At Bin Jawad, west of Ras Lanuf and about halfway along the coast, air strikes and rocket barrages stopped the rebels, who pulled back from the town.

Oil Ports

The Sidra and Ras Lanuf ports are two of the country’s six export terminals, according to the U.S. Department of Energy.

Ras Lanuf has a tanker terminal that has exported 200,000 barrels a day, as well as Libya’s biggest refinery, with a capacity of 220,000 barrels a day, 60 percent of the country’s total, according to the International Energy Agency. The Sidra terminal exported 450,000 barrels a day as recently as January, according to the IEA. Together, the two ports account for 43 percent of exports in January, according to the IEA.

Ras Lanuf has been under sporadic air and artillery bombardment since it was seized by insurgents last week. Several people were injured in airstrikes March 8 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 yesterday. He spoke before reports of a raid on the facility and calls to his office later weren’t answered.

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.

Oil Prices

Brent crude for April settlement $2.88, or 2.5 percent, to end the session at $115.94 a barrel 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.

Crude oil for April delivery dropped 64 cents to settle at $104.38 a barrel on the New York Mercantile Exchange following a government report showing a surge in domestic supplies. The contract touched $106.95 on March 7, the highest intraday price since Sept. 26, 2008. Futures are up 28 percent from a year ago.

Journalists Beaten

BBC reported that members of a BBC news team were detained and beaten by Qaddafi’s security services after they tried to reach embattled, rebel-held Zawiyah. The three men, now released and flown out of the country, were hooded and then hit with fists, knees and rifles and subjected to mock executions by members of Libya’s army and secret police who laughed during their ordeal, BBC said on its website.

Libyan Major General Abdul-Rahman bin Ali al-Saiid al-Zawi, the head of the country’s logistics and supply authority, flew to Cairo yesterday with a message from Qaddafi and asked to meet Egypt’s military rulers, the AP reported.

Additionally, a Libyan envoy met with Portugal’s foreign minister in Lisbon on yesterday, and an envoy will hold talks in Athens today with Greece’s deputy foreign minister ahead of a meeting of EU foreign ministers in Brussels today to discuss the situation in Libya.

NATO Meeting

The issue is on the agenda for a meeting of North Atlantic Treaty Organization’s 28 defense ministers in Brussels beginning today, as well as at a summit of European Union leaders the next day. The U.K. and France have urged NATO allies to consider a no-fly zone, with the U.S. less enthusiastic, while Germany and other nations have expressed concern about the consequences.

U.K Prime Minister David Cameron and Obama agreed March 8 to plan for “every eventuality” in Libya and work on a UN Security Council resolution, Cameron told Parliament in London yesterday without giving details. The two leaders also discussed providing humanitarian aid, according to the White House.

In an interview with Turkey’s state broadcaster TRT shown yesterday, Qaddafi threatened to disrupt Mediterranean shipping if Western nations take action against his regime.

The EU and the U.S. have frozen the assets of Qaddafi and his associates held outside Libya, and the Reserve Bank of Australia said yesterday 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 yesterday.

Central Banker

Libya’s secretary of planning and finance has been appointed as acting central bank governor, the Financial Times reported yesterday, citing an e-mail from the central bank’s governor Farhat Omer Bengdara. Bengdara, who has been missing for two weeks, said he has been in Istanbul and plans to resign after the crisis, the FT said.

The central bank has begun circulating old currency, a sign of liquidity problems facing the country because of the international asset freeze, the FT also reported.

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 across the region.

Saudi Shares

In Saudi Arabia, where protests are prohibited, Foreign Minister Saud al-Faisal called yesterday for “dialogue” to deal with the complaints of the Shiite minority, who mostly live in the oil-rich eastern part of the kingdom. In a televised news conference, he called on Shiite-ruled Iran, Saudi Arabia’s main regional rival, to deal with its own protests against President Mahmoud Ahmadinejad rather than interfere in Saudi domestic matters.

Concerns that popular revolts sweeping the Middle East may spread to the kingdom have sent the Tadawul All Share Index (SASEIDX) down more than 7 percent this year, according to data compiled by Bloomberg. Postings on websites have called for a nationwide Saudi “Day of Rage” on March 11 and March 20, Human Rights Watch said on Feb. 28.

Morocco’s King Mohammed VI pledged in a televised address yesterday a review of the country’s constitution by June. He promised more transparent justice, freedom to practice religion, and greater power for the nation’s regions.