Libya in Chaos

James Stafford, at OilPrice.com, argues that Libya is a failed state--just no one yet realizes it:

... the crisis began two years ago with the overthrow of Muammar Qaddafi, but in August things took a definitive turn for the worse, with armed groups seizing major oil export terminals and demanding autonomy for the eastern region. Now the crisis has reached the west where other militant formations ominously charged with guarding the country’s pipelines and oil fields are seeking to profit on the momentum of the strikers and protesters in the east. 

The interim government cannot manage this crisis. It’s already been forced to compromise, agreeing earlier in September to a 20% wage hike across the board for civil servants, and including oil security forces in this mix. At the same time, the government has issued warrants for the arrest of strike organizers in the east. 

While the government will not be able to enforce these warrants, the blowback for this still will be severe and will result in a violent upheaval unlike anything else in the past two years. This will reverberate throughout the already volatile Sahel region, threatening security in Tunisia and Algeria most immediately. It is also leading to a tightening of world oil supplies.