Libya’s Oil Surge Pits Energy Security Against Deepening Political Risk

The drive to reclaim Libya’s status as a global energy heavyweight rests on massive geological potential. Holding Africa’s largest proved reserves at 48 billion barrels, the country remains a prized asset for Western firms desperate to replace energy supplies lost following the war in Ukraine. Major players, including Italy’s Eni, France’s TotalEnergies, and Britain’s BP, are betting on long-term stability, backing new offshore gas discoveries and infrastructure projects like the South Refinery in Ubari despite the country’s volatile history.

However, this industrial optimism clashes with a fractured domestic governance structure. A new 190 billion Libyan dinar national budget, intended to stabilize the sector, has instead triggered a backlash from military councils and the Grand Mufti, who view the move as a corrupt consolidation of power by the Haftar family and Prime Minister Abdul Hamid Dbeibah. With previous peace agreements failing to prevent oil blockades, the industry remains tethered to a precarious cycle: institutionalized theft and political infighting versus the urgent global demand for high-quality light, sweet crude. For now, Western energy firms appear willing to absorb the risk, banking on the view that Libya is simply too large an energy prize to ignore.