Rebels retreated Wednesday from the key Libyan oil port of Ras Lanouf along the coastal road leading to the capital Tripoli after they came under heavy shelling from ground forces loyal to leader Moammar Gadhafi.
So for a third time (first when the rebellion started and second during the first loyalist offensive) I'll advise the rebels to do whatever they need to do to hold Ajdabiya. The coalition may be attacking loyalist heavy forces from the air, but despite the losses the loyalists have managed to go on the offensive under the air umbrella.
Hold Ajdabiya, and the loyalists are stuck out in the open with supply lines stretching west that are vulnerable to the coalition air campaign. If the rebels can pin the loyalists at the city, given some time the rebels will be chasing the loyalists west once more.
But if the rebels lose the city, offensive options open up for the loyalists. I'll modify the loyalist options a bit from the original post. As my first option, I'd strike southeast to Jalu to cut off the rebel's southeastern oil resources in order to prepare for a long war (although it would be safer to just hold at Ajdabiya and mount a drive on Jalu from Maradah, to the west--assuming the loyalists hold Maradah). Driving east to the Egyptian border is probably the worst option now that the coalition can pound road columns that close to the coast. Advancing north to Benghazi could be attempted if the loyalists can avoid large columns and quickly get their heavy stuff into the city of Benghazi to get mixed up with rebel and civilian targets.
Remember, until we get forward observers on the ground to work with the rebels, we're not really providing air support for the rebels. What we are doing is running a separate air campaign that the rebels have to adapt to if they want to exploit our air strikes.
But at risk of repeating myself, the rebels need to dig in at Ajdabiya and hold it at all costs. Well, unless their strategy is to let the loyalists approach Benghazi again to compel the West to commit ground troops--in for a penny, in for a pound, and all that. Heck, NATO is already thinking of ground troops after a win. It isn't that great a leap once you start getting used to the idea of winning to commit troops to achieve the win, eh?
UPDATE: Upon reflection, if I was running the loyalist show, I'd hold firm at Sirte while pushing the rebels east without going for Ajdabiya. I'd then prepare for another fighting withdrawal back to Sirte to again hammer approaching rebels. Repeat as necessary. This avoids having long supply columns supporting a long battle at Ajdabiya, which would be vulnerable to coalition air strikes. If I thought I could bounce Ajdabiya and get in their quickly to set up defenses in the city, I'd probably take a shot. Although the supply line issue would still exist, so there would still be some risk. Rely on foreign mercenaries to hold the city if captured to minimize that risk.
Regardless of whether the loyalists try to take and hold Ajdabiya or fight a mobile battle east of Sirte, withdrawing and advancing as needed, I'd make my main offensive efforts at Misrata near Tripoli and--far from coalition air power--against the loyalist oil resources in the deep southeast around Al Kufrah to prepare for a long war. Make the rebels a ward of the West during a time of budget woes rather than self-sufficient based on oil exports, and the rebels will have a harder time buying the expertise and weapons they need to build and army and their own air defenses.
UPDATE: Rebels are fleeing through al Burayqah (Brega) and regrouping at Ajdabiya. If any try to make a stand at Burayqah, it won't last long unless our air power really blasts them. The rebels also claim that the loyalists are flanking them from the south (which I also mentioned earlier). At what point do the loyalists make a decision about pursuing rebels at the risk of being hit by coalition air power or drawing back to again draw the rebels west before pouncing?