The major oil companies Shell, ChevronTexaco and TotalFinaElf have all closed facilities and evacuated staff from the Niger Delta in the last few weeks. As a result Nigeria’s usual oil output of 2 million barrels a day is down by 40 percent.

This cut in production has had a significant effect on the price of oil because Nigeria is the world’s sixth biggest exporter and the United States’ fifth largest oil supplier.

The situation has come as a blow to the Bush administration, which was counting on West African oil while its war in the Middle East disrupted supplies. In an attempt to put pressure on President Obasanjo to get the Delta region firmly under control the US has halted its military aid to Nigeria.

Without US backing it is unlikely that Obasanjo can retain control of his army. He has responded swiftly to the US ultimatum by sending 3,000 troops into the Delta. Reports are filtering out of army massacres and whole villages being destroyed.

The oil companies say that escalating communal violence has made it impossible for them to maintain production. Such violence, as well as attacks on oil workers, has been common for many years. But the latest incidents have been on a far greater scale than in the past.

Youths from the Ijaw community are said to have obtained automatic weapons, explosives and rocket-propelled grenades. If this is true it suggests that powerful figures within the Nigerian elite are backing them financially.

The web site Stratfor.com warned in March, “Something big is going on in Nigeria,” and suggested that the oil-rich Delta region could be about to erupt into war.

Obasanjo hopes to use the army to stamp out all opposition in the area. If he loses control of the Delta his usefulness to the US and the oil companies will be spent and he will lose political power in the rest of the country.

Communal violence has increased throughout Nigeria in the run-up to the presidential election in April. Every candidate in the election is a former general and the rivalry between them centres on who will gain control over Nigeria’s oil wealth.

None of them have any policies to address the staggering levels of poverty. Nigeria is the largest oil producer in Africa, but the majority of the population live on less than a dollar a day. Instead the presidential candidates whip up ethnic and religious tensions, setting one impoverished group against another.

The main communal conflict in the Delta region is between the Ijaw and Itsekiri, who both live in poverty amid the pollution caused by the oil companies. There have been conflicts between these groups before, but in recent months they had been collaborating in protests directed against the oil companies.

In January women from both the Ijaw and the Itsekiri communities blockaded waterways to prevent naval gunboats from passing. When they occupied a Chevron export terminal the company had to promise them regular jobs, schools, town halls, electricity and drinking water.

Since then, however, the two communities have become bitterly divided. Gangs of Ijaw youths have attacked Itsekiri villages, burning houses and killing scores of people. Ijaw spokesmen claim that new electoral boundaries favour the Itsekiri and that the oil companies have given them preferential treatment.

Ijaw militants have seized 11 oil pipeline stations and have threatened to blow them up unless the government redraws the electoral boundaries. The government has responded by sending more troops and gunboats into the Delta. There are reports of attacks by government forces and Itsekiri militants on Ijaw villages.

Refugees from Ijaw villages say the armed forces have put them under a state of siege, using both navy gunboats and soldiers. The navy is said to have imposed a 24-hour curfew to stop all movement in the areas they control.

Danka Pueba, an activist of the Niger Delta Human and Environmental Rescue Organisation, told the AFP news service that 53 members of the Ijaw community had been killed by the troops. An Ijaw youth leader, who fled 40 kilometres from his home to escape the violence, told the BBC that soldiers had burnt down several Ijaw villages in unprovoked attacks. “The army yesterday and today has been massacring our people. About four villages have been burnt down,” he said.

Thousands of refugees from both communities have fled into the swamp region south of the town of Warri. One described soldiers firing “horizontally” and torching homes and shops. She told reporters that she saw many people fall: “I didn’t stay to see if they were dead or alive.”

This escalation in violence follows the murder last month of Dr. Marshall Harry, national vice chairman of the All Nigeria Peoples Party (ANPP). Harry was running the campaign of the ANPP presidential candidate, former military ruler Muhammadu Buhari. Buhari stood a good chance of gaining control of the economically vital Delta region where Harry had his power base.

The murder has served as a signal for a descent into a spiral of ethnic violence that has cut across any common social movement that might have united all the different ethnic groups in the Delta against the oil companies. The ethnic violence has given Obasanjo the opportunity to mount a major military crackdown in the region. But in doing so he has ensured only greater political instability that will make the position of the oil companies increasingly difficult.