Fourteen years after the fall of Muammar Gaddafi, Libya is experiencing an economic recovery, driven by rising oil production and a return of foreign investment. Yet beneath the surface, this growth conceals a deeply entrenched political deadlock.
Domestic oil output recently reached 1.3 million barrels per day, attracting new exploration deals with global energy giants including BP, Shell, and ExxonMobil.
The resulting oil revenues are bolstering the Central Bank in Tripoli and funding certain areas of public expenditure. However, much of this wealth flows through opaque channels, including inflated contracts, fictitious salaries, and networks linked to militias.
Despite these gains, Libya’s infrastructure remains fragile, inflation persists at high levels, and chronic fuel shortages continue to affect everyday life. With more than 90% of government revenues reliant on hydrocarbons and a lack of meaningful reforms, the economic recovery remains precarious.
Politically, the country is sharply divided between two rival administrations.
The Tripoli-based government is supported by the UN and Turkey, while Khalifa Haftar’s government in Benghazi relies on backing from Russia and Egypt.
Efforts to implement the UN’s electoral roadmap have stalled, and ongoing militia clashes maintain a climate of instability. Analysts note that this political inertia primarily benefits armed groups and entrenched clans, who profit from subsidies, trafficking, and control over public procurement.
Foreign powers play a critical role in sustaining this fragile equilibrium. Turkey supplies weapons and advisors to Tripoli, Russia reinforces its presence in the east through the Wagner-linked Africa Corps, and Egypt and the United Arab Emirates continue to support Haftar.
Regional actors often prioritise immediate security and economic interests, rather than a coordinated approach to stabilise Libya.
Experts warn that the delicate balance could be disrupted by an oil crisis, diplomatic fallout, or renewed conflict.
For now, the flow of oil sustains the economy, but without stronger institutions and political cohesion, Libya’s unity and long-term stability remain uncertain.
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