How to Mess up a Revolution? Add Oil and Stir

Oil can be a blessing or a curse for unstable nations.

Mar 19, 2014 at 10:03AM

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out these recent articles:

Following the popular uprising that saw the overthrow of the country's dictator, Libya had everything going for it. Or so many Libyans thought.

It had the natural resources to generate revenue needed to modernize the ageing and decaying infrastructure throughout the country. It had the workforce needed to carry out menial labor and could always import more from Egypt or its neighbors to the south, and it had hundreds of highly educated and skilled Libyans who had lived in Europe and in the United States who were willing to go back and help restructure the country. And it could call on experts from the West as required.

But that was until the very product that could solve the country's ills and save it from the fate of poorer countries to the south– oil -- became a prominent factor in the political and social upheaval currently affecting the country and dividing the Libyans to the point where the danger of civil war now looms on the close horizon.

Libya is a relatively small country with a small population of only about six million and large revenues collected from the huge oil reserves that the country has been blessed with. But is Libya's oil a blessing or a curse?  

Indeed that question begs to be asked, as oil is rapidly becoming a serious issue to contend with. Every party and group that took part in Libya's recent revolution, the one that finally got rid of Gadhaffi, now wants a piece of the pie.  

The answer is that oil at this point could be either a blessing or a curse, although the danger is that the leaning could be more toward a curse as opposing parties and militias all vying for a greater share of the oil revenues and all still carrying weapons are resorting to outright armed clashes that eventually could lead to an all-out civil war.

During the long decades of the dictator's rule, revenues from the country's vast oil and natural gas supplies have been wrongly used. Since Moammar Gadhaffi's revolution when the young colonel overthrew King Idris and declared the country a "Jamahiriya "--- a word that Gadhaffi created by combining the Arabic words for jumhuriya,  (republic) and jamaheer, (people, crowds, the public) – utilities and institutions needed by the public were greatly ignored and are today in dire need of updating.  

Indeed, besides filling up his and his family's personal bank accounts Gadhaffi spent billions of dollars on military hardware, such as tanks, hardware that the country did not need. At the time of the revolution Libya had 10 tank battalions.

According to the London-based International Institute for Strategic Studies, in 2009 it was estimated that Libya had 1,514 tanks. Of those, there were 181 Soviet-made T-72, 89 T-62, 494 T-55, 1,040 T-54.  Plus Libya had also purchased a number of Brazilian vehicles.

The total number of tanks placed Libya among the top five countries in terms of number of tanks at its disposal. What is not certain is just how many of those are still operational.

Furthermore, the former Libyan leader equipped each battalion with different tanks so that the parts and units could not be interchangeable.

A typical example of the mayhem that may follow in the weeks and months ahead – unless firm action is taken to curb the militias operating on the sidelines of the law, is the recent incident concerning the oil tanker Morning Glory.

As the vessel sailed close to Libyan territorial waters it turned off its transponder, thus becoming invisible to computers equipped with special software allowing the exact position of a vessel to be recognized. The Morning Glory entered the port of Es Sider, not at the invitation of Libya, but upon the demand of one of the key figures of the revolution, a certain Ibrahim Jathran, who had since become a militia leader and wanted to graduate from street fighter to oil tycoon.

Jathran, acting against the orders from Tripoli, filled the tanker with oil worth some US$33 million, a move that Deborah Jones, the US ambassador to Libya called "theft from the Libyan people."

But that is not the end of the story. On Monday night US Navy SEALS boarded the Morning Glory and arrested all on board. The Navy SEALS may have solved Libya's immediate problem, but let's hope the US Marines will not have to return to the shores of Tripoli.

A dwindling role for OPEC?
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

 

Written by Claude Salhani at Oilprice.com.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers