Over the weekend, Libyans awoke to discover that American Navy SEAL special forces had seized control of a ship in the Mediterranean, the Morning Glory, which was laden with contraband Libyan oil and sailing under no flag whatsoever. It had been a North Korean tanker, but was apparently purchased by renegade Libyan factions attempting to begin privately exporting the nation’s oil for their own personal benefit. It was yet another reminder of Libya’s extreme fragility, the impotency of its central government, and, as I have argued recently elsewhere, the fact that almost all of its problems boil down to a quixotic and self-defeating battle over its nascent oil wealth.

The central figure behind the Morning Glory debacle is Ibrahim Jadhran, a militia leader who made his name in the battle to oust former dictator Moammar Qaddafi. In perhaps their single biggest blunder following the overthrow of the dictator, the new Libyan authorities tried to co-opt militias into the new system in various ways. The worst of these was the creation of the so-called “Petroleum Security Guards” (PSG), which aimed to protect the all-important energy sector production facilities in Libya’s oil-rich eastern provinces but only handed these key areas to unreconstructed militias.

After the war, Jadhran graduated from commander of the “Hamza brigade” militia – that had initially been pro-Qaddafi but quickly defected to the rebels – to a key figure in the PSG, which was formed soon after the uprising ended. Operating from this new power base, he moved in the summer of 2013 to unilaterally seize control of the key Es Sider and Ras Lanuf oil ports. He accused the government of being corrupt and neglecting the eastern provinces. Indeed, he set himself up as a key figure in an autonomous, if not secessionist, movement in Cyrenaica, where deep economic and social grievances have persisted into the post-Qaddafi era.

But Jadhran’s demands for a new “federalist” system in Libya in which Cyrenaica would get more of its share of the revenues of its own oil resources proved, of course, to be just a cover for personal and political greed, power, and ambition. By last October, he had already managed to block more than $5 billion in Libyan national oil exports and began threatening to set up his own independent petroleum network.

In November, Jadhran named his close ally, Abd-Rabbo al-Barassi, “Prime Minister” of a new “Cyrenaica Political Bureau,” and announced the formation of an independent oil company and central bank for this de facto authority. But with such high stakes, they quickly found themselves in competition with a rival: the “Cyrenaica Transitional Council.”

However, even this rivalry didn’t stop the two “federalist” groups, along with Jadhran personally, from signing a joint deal in December with the Canadian lobby group Dickens & Madson – which is led by Ari Ben-Menashe, who claims to be an Iranian-born former Israeli intelligence operative, and has also represented such luminaries as Zimbabwe’s Robert Mugabe – to facilitate contraband oil exports and seek recognition from Russia and other potential sources of international diplomatic support.

While there may be genuine sympathy for the vague notion of autonomy, and a greater share of the pie, in much of the east of Libya, these sentiments are clearly being exploited by shady individuals for personal power and enrichment. And in early March, when the Morning Glory turned off its transponders in the Mediterranean so as to disappear from international sight, the full-blown power-play began. The ship re-emerged at Es Sider and began taking on a full load of contraband oil worth over $30 million from the “federalists.” Jadhran personally led the celebrations that accompanied this brazen theft, including slaughtering a camel on the dock side.

What passed for a federal government in Tripoli was meanwhile mired in an endless campaign by Islamists to unseat then-Prime Minister Ali Zeidan. Zeidan ordered the ragtag Libyan Armed Forces to intercept the Morning Glory, but he was totally ignored. He then turned to the “Libya Shield” militia umbrella group, which loosely supports the central government and is led by the Misrata militia. This only underscores the dangerous and lingering power of these armed groups, and the extent of government reliance on these unregulated forces. But while they chased down the ship they were also unable to stop it.

The failure to interdict and stop the Morning Glory and its contraband cargo of stolen oil provided Zeidan’s Islamist enemies with a golden opportunity to oust him, and they ensured that Parliament sacked the prime minister and issued arrest warrants and a travel ban against him. He fled the country, and warned of an Islamist plot to seize power. But Jadhran and the other eastern federalists are also at odds with the Islamist parties.

The central government, again using the Misratan-led Libya Shield militia, attempted to move against the federalist rebels across the coastline, but found itself confronting not only an incongruous set of forces vaguely aligned with Jadhran, but also the constant threat of its long-standing rivals, the Zintan militia. Libya seemed, and may still be, headed for a bruising and nation-wide confrontation between loosely allied forces confronting each other over ideology and money.

It was at that point that American forces, trying to stem the tide of regionally destabilizing civil conflict in Libya, seized the Morning Glory, which was operating without any flag or a national registration.

There may be at least a temporary solution in the offing. The Misratan-led Libya Shield has withdrawn from airbases and oilfields near Sirte as mediation efforts are focused on a deal in which Jadhran would leave the country and the areas under his control would be taken over by the current head of the PSG, Idris Buhamada. Buhamada, though also from the east, is seen as distant from the entire “federalist” movement and much less of a threat to Libyan national unity than Jadhran and the forces he unleashed when he controlled the Guards.

But a similar deal last December fell through. And for now, the standoff on the ground continues, with persistent rumors that more oil tankers may be headed to Libyan ports outside government control. Even if he did end up leaving the country, and further contraband Libyan oil shipments were interdicted by American or other forces, tensions in Libya would undoubtedly persist.

Zeidan’s warnings about the ideological ambitions of the extremely unpopular Islamists are certainly correct, especially given the likely and dire outcome for them in the July parliamentary elections, where they will be lucky to retain any seats whatsoever.

The entire Morning Glory incident only underscores the persistent, if not growing, power of uncontrolled militias which take on ideological affiliations largely to suit their drive for power and money. Libya’s second-largest oilfield has once again been shut down by protesters and sympathetic PSG militia forces. The Sharara facility has been rocked by Tuareg ethnic protests and, now, PSG grievances over unpaid salaries. Its closure costs Libya an estimated $34 million a day.

The tensions that fueled everything that led up to, and is following from, the Morning Glory affair boil down to what is driving almost all of the major fault lines in Libya: everyone wants the largest slice of the petroleum pie they can grab. As militias and politicians scramble for control of it, Libya’s energy sector lies in tatters and is operating at a tiny fraction of its normal, let alone potential, capacity.

So the Morning Glory story is that a country that ought to be booming with oil wealth is ripping itself to pieces – and ripping itself off – in a series of conflicts driven largely by an effort to control that potential wealth. And because of that struggle, presently Libya has no oil wealth at all.

Aesop’s classic fable in which a dog loses the bone it has by chasing after its reflection in the water nearby – wanting  to have both and ending with neither – has rarely been better illustrated in national politics. If they continue like this, Libyans may not only lose their potential oil wealth, they may lose their country.