The Strait of Hormuz, a mere 39km at its most constricted, traditionally funnels an astounding 20 million barrels of oil daily — a staggering quarter of the world’s maritime crude trade. Yet, recent US and Israeli strikes on Iran, swiftly followed by Tehran’s closure of this pivotal waterway, sent Brent crude prices spiraling towards $120 a barrel. Gulf producers slashed output. The bypass pipelines? They manage a mere 5 to 6 million barrels. The world grapples with an intractable chokepoint conundrum. But beneath the clamor of the Hormuz crisis, a parallel, equally menacing scenario is unfolding on Europe’s southern flank, where Libya oil disputes are quietly forging a new, precarious energy bottleneck.
Libya, strategically positioned, should be an uncontroversial boon to global oil commerce. Its crude loads swiftly from northeastern terminals, reaching Italian refineries in a mere 48 hours. These routes bypass the need for military escorts, avoid war-risk premiums, and circumvent the lengthy detour around Southern Africa—unlike oil originating from the tumultuous Gulf region during periods of conflict. Furthermore, Libya provides the prized light, sweet crude varieties that European refiners desperately require. In a telling move last March, Egypt formalized market signals, securing approximately one million barrels monthly from Libya to mitigate the lingering disruptions emanating from Hormuz.
Historically, Europe has eyed its southern energy neighborhood with opportunity, often exhibiting a predictable reluctance to scrutinize sources too closely, provided the taps kept flowing. This very habit birthed Europe’s deep reliance on Russian gas, a dependence that persists despite the war in Ukraine. This identical pattern now shapes Europe’s uneasy relationship with Libyan oil. And, unequivocally, the reckoning is at hand.
Unpacking Libya Oil Disputes
Libya has existed without a unified, functioning government since 2014. In Tripoli, the internationally recognized Government of National Unity (GNU) under Abdul Hamid Dbeibah nominally holds sway. Conversely, in the eastern territories, rogue military commander Khalifa Haftar asserts control through brute force. His self-styled Libyan National Army (LNA) physically occupies the very ground where Libya’s black gold resides: the critical export terminals along the northeastern coast, the expansive field in the remote southwest, and the productive fields scattered across the southeast.
While Tripoli may ink the contracts, it is ultimately Haftar who dictates whether a single barrel flows. Should any political impasse arise, his forces have a consistent playbook: they halt the oil. Ports may close without warning. Protests, seemingly spontaneous, materialize at pipeline junctions and field gates, orchestrated by tribal intermediaries, only to dissolve the moment a deal is hammered out. The oil resumes its journey, but invariably, a heavy price has been exacted.
During the intense European energy crisis of 2022, spurred by Russia’s invasion of Ukraine, a clandestine bargain was struck in Libya. Not between formal governments, but between individuals: Ibrahim Dbeibah, the GNU’s national security adviser, and Saddam Haftar, the LNA’s deputy commander and Khalifa’s son. Their Abu Dhabi arrangement led to the establishment of Arkenu, a private oil company incorporated in the east, directly linked to the Haftar family, and meticulously designed to divert oil revenues outside Tripoli’s legitimate control. This scheme ostensibly kept the fields operational. However, as confirmed by the latest United Nations Panel of Experts report, leaked in late March, it systematically bled the Libyan state coffers dry. Tens of millions of barrels were exported through Arkenu, with billions in oil revenues channeled into private foreign accounts. The crude reached European refineries, yes, but the funds never reached the Libyan treasury.
Just last Thursday, Tripoli finally terminated the controversial Arkenu agreement, citing corruption and the scandalous diversion of revenues from the Central Bank of Libya. The immediate, chilling danger, however, is that the very mechanism sustaining Libya’s oil flow has shattered, with no credible replacement framework in sight. The United States, through Trump’s senior adviser Massad Boulos, has been diligently attempting to broker new negotiations between Tripoli and Haftar’s faction, conducting meetings in Paris and Tunis. These discussions focus squarely on unifying the national budget and stabilizing the fragile economy, pointedly sidelining elections in favor of transactional arrangements among the very factions that begot Arkenu. It’s a familiar, deeply cynical logic: stability without accountability, commercial expediency divorced from democratic legitimacy, and an imposed ceiling on Libyan political evolution, all to ensure the oil continues its uninterrupted journey.
Yet, a new deal remains elusive. Haftar’s own son has already publicly disavowed certain outcomes of these talks as nonbinding. Progress, as of this week, is limited. Haftar maintains every lever of power he has always wielded. The oil ports could once again be shuttered before any new framework is solidified, leaving Europe frantically searching for answers to its deepening energy dilemmas. Furthermore, as the internal political fabric unravels, an external European conflict has ominously seeped into Libyan waters. In the Strait of Hormuz, Iran transformed energy infrastructure into a battlefield. The Mediterranean, disturbingly, now witnesses a similar dynamic.
On March 3, Ukrainian naval drones, allegedly launched from the Libyan coast near the Mellitah oil and gas complex, struck the Arctic Metagaz. This liquefied natural gas tanker, part of Russia’s shadow fleet evading sanctions, sustained damage en route to Egypt and has been left adrift in Libyan waters ever since. Two weeks later, on March 17, an explosion tore through an export pipeline of the Sharara oilfield in southwestern Libya’s Hamada area, igniting a ferocious fire. Investigators reportedly recovered Russian-made munitions at the scene—an M-62 aerial bomb and 130mm rocket fragments—strongly suggesting sabotage. In Hormuz, tankers face blockades and direct strikes. In the Mediterranean, vessels are hit and left abandoned. The mechanics diverge, but the profound threat to supply remains identical. The current Libya oil disputes, compounded by external interference, are creating an incredibly unstable environment.
The Hormuz crisis was never merely an act of geography. It was the brutal consequence when diplomacy was forsaken and conflict embraced. The Mediterranean Sea, by contrast, is not a narrow strait; it cannot be blockaded. Yet, tankers are being struck, pipelines blasted deep within the desert, and the proxy wars once confined to Libyan factions now manifest between Russia and Ukraine—played out directly upon Libya’s vital oil infrastructure and, chillingly, on Europe’s very doorstep. For a comprehensive understanding of the evolving global energy outlook, consult the latest international reports.
About the Author
