Qaddafi’s Firepower Advantage Puts Rebels on the Defensive

March 11, 2011, 8:18 PM EST

By Jonathan Tirone, Massoud A. Derhally and Benjamin Harvey

(See EXTRA and MET for news on the regional turmoil.)

March 12 (Bloomberg) -- Libyan leader Muammar Qaddafi strengthened his control in and around Tripoli, the capital, as his forces fought the small number of rebels reported to be still dug in at oil installations in Ras Lanuf.

Pro-Qaddafi demonstrators were shown on state television celebrating in the main square of Zawiyah, a coastal city 30 miles (50 kilometers) west of Tripoli where rebels finally yielded this week after intense attacks by Qaddafi’s forces. The government brought foreign journalists to the city yesterday to discredit rebels’ claims that fighting was continuing. Libyan forces are besieging another strategic rebel-held town, Misrata, about 90 miles (145 kilometers) east of Tripoli, according to residents, as the momentum in the conflict has shifted in Qaddafi’s favor.

UN Secretary-General Ban Ki-moon said in New York that he is dispatching a special envoy to Tripoli this weekend in an effort to stop the violence and seek access for humanitarian aid. At a European Union summit in Brussels, a majority of the leaders were “very reluctant” to launch military action sought by the rebels and agreed a no-fly zone would need United Nations and Arab support, Luxembourg Prime Minister Jean-Claude Juncker told reporters.

“It needs to be clear that this is the only remaining option to protect civilians from the Qaddafi regime,” he said of a no-fly zone.

Oil Slides

Oil, which has risen about 20 percent in three weeks of fighting in Libya, fell yesterday in New York, bringing the week’s decline to 3.1 percent. Oil for April delivery tumbled $1.54 to $101.16 a barrel on the New York Mercantile Exchange, the lowest settlement since March 1.

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 yesterday 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.

Oil Installations

Libyan fighting yesterday raged around Ras Lanuf, which has a tanker terminal, storage depot and the country’s largest refinery, said Abdel Hafiz Ghoga, a spokesman for the opposition’s transitional national council. He said opposition forces were in control of the oil installations, some of which were on fire. At least eight rebels were killed in fighting there, Al Arabiya television reported. Libyan government forces used warplanes, tanks and artillery against the rebels.

Qaddafi loyalists won control of the city’s center March 10, and have directed airstrikes and artillery against rebel holdouts near the oil facilities. Qaddafi is engaged in “a desperate attempt to get his hands on the oil,” said Ghoga, urging foreign powers to impose a no-fly zone “very quickly.”

President Barack Obama, speaking to reporters at the White House, said U.S. and NATO allies continue to consider a “wide range of options” as they are “slowly tightening the noose on Qaddafi” and those around him with economic sanctions and other measures. He said that his administration is assigning an envoy to work with the Libyan opposition and that NATO will consider a no-fly zone at a meeting March 15.

Assets Freeze

The U.S. Treasury Department announced steps to freeze the assets and block business dealings of Qaddafi’s immediate family members and top security advisers, including Qaddafi’s most trusted aide, Abdullah Al-Senussi, the director of Military Intelligence, who the Treasury statement said organized mass killings in Benghazi early in the uprising and recruited foreign mercenaries fighting for Qaddafi.

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.

Humanitarian Needs

In Washington, Ali Aujali, who had been Qaddafi’s ambassador to the U.S., said he met yesterday with senior officials at the Treasury and State Departments to urge that Libyan assets frozen by the U.S. be released for use obtaining humanitarian aid in rebel areas. “Anything that can help, we are ready to accept” other than foreign troops, he said.

Abdel Rahman Shalgam, who was Qaddafi’s envoy to the UN and now represents the opposition’s National Transitional Council, said they also appealed to Assistant Secretary of State Jeffrey Feltman to have the U.S. press for a NATO-run no-fly zone.

Qaddafi’s son, Saif al-Islam, who has emerged as the regime’s top spokesman, vowed March 10 to regain lost territories with a full-scale offensive against the rebellion.

“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.”

Mortar Attack

Qaddafi’s forces March 10 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 yesterday.

“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.”

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. NATO can’t impose one without a mandate from the United Nations Security Council, NATO Secretary General Anders Fogh Rasmussen said March 10.

The Arab League plans to hold an emergency meeting today to consider supporting a no-fly zone. Iraq’s representative to the Arab League, Qais el-Azzawy, said his country supports imposition of a no-fly zone, according to Egypt’s Middle East News Agency. The African Union has rejected foreign intervention and said five African heads of state will try to start talks among Libyan factions.

Diplomatic Recognition

Rebel leaders March 10 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.

Elsewhere in the region, protesters in Saudi Arabia stayed away from a “Day of Rage” after police were deployed in force to deter political activists. Police in Riyadh, the capital, manned checkpoints yesterday around the Al-Rajhi mosque. Police were positioned on every block along Olaya, a main street in the center of the city. On the eastern city of Al-Hofuf, several hundred people calling for Shiite Muslim prisoners to be released, according to two activists who declined to be identified for security reasons. Saudi Arabia, an absolute monarchy, prohibits protest demonstrations.

Appeal to Abdullah

Saudi academics, writers and representatives of the minority Shiite Muslim population have called on King Abdullah, the sixth monarch in the Arab world’s largest economy, to move the country toward a constitutional monarchy.

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.

Saudi Arabia and other Gulf states March 10 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.

--With assistance from Mariam Fam in Cairo, Inal Ersan, Nayla Razzouk and Vivian Salama in Dubai, Blanche Gatt and Brian Swint in London, Glen Carey in Riyadh, Nadeem Hamid, Indira A.R. Lakshmanan, Viola Gienger and Terry Atlas in Washington, Dahlia Kholaif in Kuwait, Stephanie Bodoni in Brussels and Bill Varner in New York. Editors: Terry Atlas, Robin Meszoly

To contact the reporters on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net; Massoud A. Derhally in London at mderhally@bloomberg.net; Benjamin Harvey in Ankara at bharvey11@bloomberg.net

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