Libyan leader Muammar Gaddafi and a Libyan oil refinery
Updated: Feb. 21, 2011, 7 p.m. E.T.
Libya's leader Muammar Gaddafi's rule seemed to hang by a thread on Monday as the Middle East's wave of revolts threw North Africa's biggest oil power into turmoil, threatening not just to end Gaddafi's 41 years in power, but to rock the petroleum world too. With up to 300 people estimated to have been killed during a week of clashes between protesters and security forces, the price of oil futures soared in London and New York City, as oil companies raced to extract their staff from the mounting chaos.
Rumors were rife on Monday that the regime was splintering in numerous ways, perhaps fatally. Libya's ambassadors in Indonesia, Poland and Bangladesh, as well as lower-level Libyan diplomats in Sweden, all quit their posts in protest at the brutal crackdown on protesters, according to al-Jazeera. And Gaddafi ordered the air force to fire on military installations in order to prevent weapons from falling into the hands of antigovernment groups, according to the BBC. British Foreign Secretary William Hague added to the drama by telling reporters on Monday that Gaddafi was en route to Venezuela. Update: Venezuela denied that it was providing asylum for the Libyan strongman. And just before 2 a.m. Tuesday morning, Libya time, the country's state television aired a very brief clip of a slightly damp Gaddafi, collapsing an umbrella and getting into a car, saying he was not in Venezuela and remained in Tripoli "with all these dogs," according to a cryptic translation rebroadcast by CNN.
Critical to Libya's economic survival is oil, which provides more than 90% of the country's revenues. Yet until now the uprisings that erupted across the region in late December have barely touched supplies of oil and gas, despite the mammoth reserves in numerous Arab countries, and the U.S. and Europe's heavy dependence on those energy imports. Tunisia has no oil, and Egypt's importance is far greater as an oil-transit country, with critical exports passing through the Suez Canal. Since the U.S. lifted sanctions in 2005, about 100 companies have rushed into the Libya, eager to tap into one of the last great frontiers of unexplored oil. On Monday, BP announced that it was suspending its plans to begin onshore drilling for natural gas, a $900 million deal cut in 2007.
Oil futures for Brent crude, traded on the ICE Futures Europe market in London, rose to nearly $105 a barrel, the highest price since the global economic meltdown hit in September 2008. Libya's oil fields are hundreds of miles from the current upheaval, many in remote Sahara Desert locations a good one-hour flight from Tripoli on private planes operated for the benefit of oil companies. Yet even there, the potential for unrest exists. On Sunday, Sheik Faraj al-Zuway, a tribal leader in western and southern Libya, in which some big oil fields fall, told al-Jazeera that he would halt all oil distribution from his territory beginning Monday, until security forces "stop the bloodshed," he said, adding that "the blood of Libyans is more precious than oil."
Libya cut off all mobile and landline communications on Monday as gunfire was reported in one part of Tripoli while locals tried to protect their property from looters. A resident of the Libyan capital sent online messages to TIME late Monday afternoon, describing how a "rag-tag militia" armed with small weapons had opened fire on protesters, who in turn threw rocks at them. Earlier in the day, he said he had seen widespread burning of government property in the capital — a totally unprecedented show of public anger in Libya. "Every government building burnt, [and] police [stations]. Center, all around — everything, man." wrote the resident, who said it was still too dangerous for him to be named.
Despite severely disrupted communications, some exile organizations have continued posting reports sent by Libyans inside the country. That included information on Monday that Benghazi, the country's second largest city, was now "calm and stable," according to Ahmed Addarrat of the Libyan-American group Enough/Khalas, which is composed largely of the children of exiled political activists. "Citizens have full control" of Benghazi, he said on Monday.
At about 3:45 p.m. Tripoli residents reported seeing about five military helicopters and two fighter jets swoop overhead toward the western outskirts of the city, where Gaddafi's compound is situated, fueling speculation that the leader was about to flee. About two hours later, the BBC reported that two Libyan Mirage fighter jets and two helicopters had unexpectedly landed at Malta International Airport, a short flight from Tripoli, apparently without prior clearance from Malta's Foreign Ministry. By nightfall, Maltese officials said the aircraft had carried five French citizens and that the Libyan pilots had requested political asylum by radioing Maltese air-traffic control while in the air.
Curiously, the Gaddafi regime appears to have been taken by surprise by the uprising — perhaps a measure of how static the country's politics has been for decades — in spite of the fact that the eruption is similar to the beginnings of the Tunisian and Egyptian revolutions, which ousted the Presidents of both those countries. A Western business adviser with close relationships to many Libyan officials told me on Monday that during a visit to Tripoli two weeks ago, "all my Libyan friends said 'No way would this happen here. Our tribal leaders will keep young people in order.'" Now, he said, he believed Gaddafi would likely lose power completely, or retain a figurehead role without any concrete authority. "It will be difficult for the Gaddafi clan to rescue this," he said.
With the realization that Gaddafi's rule might not survive, foreigners working for numerous oil companies scrambled to leave Libya. The companies clearing expatriate employees out included the French energy giant Total, Spain's Repsol and Austria's OMV. It was not clear on Monday whether Americans working for Marathon Oil, ExxonMobil and Chevron had also left. And despite the panic, oil companies appeared keen to play down the effect on their operations. "For the time being our production and operations are not impacted by conditions in Libya," Total's spokesman in Paris, Florent Segura, told TIME on Monday. Still, he said, "we've started to launch the process of return for families and most of the employees."