Rebel Oil Companies and Wartime Economic Governance in MENA

Abstract

Oil smuggling has become a major feature of the war economies across the MENA region but the contest is not just for physical possession of oil through seizure and looting. Equally important is the political, legal and symbolic battle for ownership and authority to manage and dispose. Even as national economies splinter and collapse, the formal institutions of economic governance have unique capabilities and prerogatives and accordingly become focal points of contestation between rebel actors and governments. Rebels in Yemen, Iraq and Libya have launched alternative financial institutions, including national oil companies, central banks and other financial institutions, tied to petroleum sales. Such entities, unlike secretive smugglers, court publicity and tout their legitimacy and legality. This paper argues that these rebel oil companies and the attendant financial institutions are not merely facilitators of fraud but components of rebel governance and diplomatic strategies to enhance the durability of rebel rule. Rebel national oil companies (NOC)s and related institutions serve as points in conflict financing, facilitating the conversion and integration of illicit revenue into streams of normal or licit financial operations. They ease rebels’ linkage into global markets for oil and other natural resources.