Putin Gains Influence in Oil-Rich Libya as US Struggles to Oust Wagner Group

  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- While the US ponders whether to reopen its embassy in Libya, Vladimir Putin’s new ambassador is preparing to take up his post in the capital, extending Russian influence across an oil-producing nation on the doorstep of Europe.

Most Read from Bloomberg

Russia’s Wagner Group, a private military company controlled by Putin ally Yevgeny Prigozhin, already has access to key oil facilities and supported last year’s monthslong blockade that hit exports at the height of the energy crisis triggered by the invasion of Ukraine.

Read More: Libya’s Political Chaos Is Worsening a Global Oil Supply Crisis

Moscow’s decision to reestablish its diplomatic presence in Tripoli — western seat of the United Nations-backed government — is the clearest sign yet that Putin is looking to make inroads beyond his traditional support for military commander Khalifa Haftar in the east.

The developments have prompted concern in the US, which has dispatched a slew of senior officials to counter Putin’s advances in an OPEC member that European governments are courting as a potential alternative to Russian energy.

They include CIA chief William Burns, who visited Libya in January, speaking to rival governments in east and west and later meeting officials in neighboring Egypt, which has also supported Haftar.

Top of the US agenda is a bid to oust an estimated 2,000 Wagner mercenaries who supported Haftar’s failed 2019-2020 campaign to capture Tripoli and have since helped bolster his grip on oil supplies in a country that’s home to 40% of Africa’s reserves.

“The status quo is inherently unstable,” US Special Envoy to Libya, Richard Norland, said in a phone interview, warning of unspecified efforts to exploit internal divisions and thwart UN efforts to hold elections. “Our message is you’re only going to get legitimacy through elections.”

But the US is at a disadvantage in Libya, where it has no troops and no diplomatic presence. Though US officials say they’re working to reestablish their own embassy, the decision remains politically fraught for Joe Biden, who was vice president during the NATO-backed rebellion that ousted longtime dictator Muammar Qaddafi in 2011 — and Libya’s subsequent descent into chaos. Read More: Why Libya Lurches from One Crisis to The Next

The US embassy was closed in 2014 as Libya slid into civil war. An attack on the US consulate in the eastern city of Benghazi had already killed ambassador Christopher Stevens and three other Americans in 2012, fueling a domestic political uproar that complicates any potential decision to return.

That’s left the US with waning leverage as it tries to manage the situation from afar.

The renewed international rivalry in Libya comes as Russia makes other gains in the Middle East at the expense of the United States. Traditional Arab allies have refused to comply with US efforts to isolate Putin, going so far as to restore their ties with Syria’s Kremlin-allied President Bashar al-Assad. Saudi Arabia riled the White House late last year when OPEC+ — a cartel of oil producers led by Riyadh and Moscow — pushed up global fuel prices by cutting crude production

Meanwhile, China’s role in brokering a rapprochement between Saudi Arabia and Iran has highlighted the broader erosion of US authority.

Oil Hostage

Though their numbers have dwindled since the invasion of Ukraine from highs above 4,000, Wagner forces are present at four military bases in Libya, according to the Libya-based Sadeq Institute think-tank and the Navanti Group, which advises private clients and US government agencies. The paramilitaries also have access to some of the country’s most important energy facilities including the biggest oilfield, Sharara, and Es Sider crude export terminal, their on-the-ground research shows.Putin’s spokesman Dmitry Peskov didn’t respond to a request for comment on Russia’s Libya policy or the role of Wagner forces in the North African country.

Mustafa Sanalla, the former head of Libya’s National Oil Company, or NOC, accused Wagner and the United Arab Emirates of involvement in Haftar’s 2020 oil blockade. A subsequent blockade in 2022 ended with Sanalla’s ouster in favor of a more eastern-friendly figure.

“The shutdown was of course mainly due to the domestic politics of oil revenue distribution,” said Navanti’s senior Libya analyst, Robert Uniacke. “But I do not believe that it could have unfolded in the way it did without Wagner’s role in propping up (Haftar’s forces) and projecting military power in the areas around the oil facilities.”

Moscow’s efforts to restore the influence that it lost with Qaddafi’s demise haven’t always gone smoothly. Both Haftar’s assault on Tripoli and efforts to elevate the late dictator’s son, Saif al-Islam, to the presidency have failed.

Putin now appears to have settled for a policy of supporting the status quo, a situation that potentially leaves Libya’s oil exports hostage to Russia, which is feeling the squeeze from sanctions on its own crude sales.

In an interview with Bloomberg, the new NOC chief, Farhat Bengdara, praised Haftar’s forces for their “great efforts in securing” the oil fields. He said Libya plans to open up new blocs to international companies in 2024 and raise output from 1.2 million to 2 million barrels a day within five years. Most oil analysts doubt that the NOC can pull that off without more political stability.

“Our impression is that the West is trying to achieve stability in Libya to ensure that more oil and gas supplies from that country reach European markets,” said Elena Suponina, a Middle East analyst based in Moscow. “The Kremlin understands that the US wants to use any means to weaken Russia’s influence in Libya and one of our tasks is not to allow this to happen.”

Wagner’s possession of warplanes and air defense systems also complicates US efforts to counter the group. Haftar relies on them to protect him and fend off opposing Libyan militia.

Gleb Irisov, a former Russian air force officer who served in 2019-2020 in Syria’s Khmeimim air base, used by Moscow to supply Wagner forces in Libya, said he personally saw up to 20 Soviet-built MiG-29 fighter jets as well as attack helicopters delivered to Libya.

As Wagner’s influence spreads to Sudan, where the US says they’ve delivered surface-to-air missiles to the Rapid Support Forces waging war against the army, the Biden administration is stepping up pressure.

Last month, the US imposed sanctions on a man accused of overseeing Wagner’s operations in Mali. It alleges the group is running guns through Africa to support Putin’s campaign in Ukraine — where the paramilitaries have also fought.Read More: Putin’s Mercenary Prigozhin Shifts Focus After Ukraine SetbacksThe Existential Question About Putin’s Mercenary Boss: Opinion

The US has repeatedly imposed sanctions on Wagner and its leadership structure, including Prigozhin. Those efforts have so far made little dent in the group’s operations, including its push to deepen a toehold in several African and Middle Eastern nations. Absent military intervention, it’s not clear what will.

“These have been proclaimed as US objectives: No. 1 expel Wagner and No. 2 make sure the elections happen in 2023,” said Jalel Harchaoui, a Libya expert at the London-based Royal United Services Institute. “Neither thing is going to materialize, mainly because the US is not really going to try.”

--With assistance from Demetrios Pogkas and Tom Hall.

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.