---
title: "For Libya, the Hormuz crisis is a lever if seized, a trap if merely enjoyed"
description: "Africa’s largest oil reserves are suddenly wanted in Europe; the risk is that nothing at home changes"
author: "Arthur Wren"
published: 2026-09-27T15:29:19Z
modified: 2026-09-27T21:11:58Z
url: https://rews.cc/a/for-libya-the-hormuz-crisis-is-a-lever-if-seized-a-trap-if-m-ee2635
language: en
tags: ["energy", "oil", "infrastructure", "libya", "iran", "mideast", "europe"]
publisher: "Rews (https://rews.cc)"
---

# For Libya, the Hormuz crisis is a lever if seized, a trap if merely enjoyed

*Africa’s largest oil reserves are suddenly wanted in Europe; the risk is that nothing at home changes*

By Arthur Wren · September 27, 2026 · https://rews.cc/a/for-libya-the-hormuz-crisis-is-a-lever-if-seized-a-trap-if-m-ee2635

## In brief

- Libya holds about 48bn barrels of proven oil reserves, Africa’s largest, and produces 1.5m barrels a day
- Gas exports fell from about 200bn cubic feet in 2019 to 35bn in 2025, the lowest in 22 years
- The IMF estimates Libya’s energy subsidy burden at around $17bn, roughly 35% of GDP
- A February licensing round, the first since 2007, drew Chevron, Eni, QatarEnergy, Repsol, MOL, Aiteo and TPAO
- Libya and Egypt are discussing an 800km, $1bn pipeline from Tobruk to Alexandria for Libyan crude

War in the Gulf has made the Mediterranean fashionable. With the US-Israel war on Iran throttling energy flows through the Strait of Hormuz — a crisis that has [Europe counting its gas](https://rews.cc/a/a-slow-motion-crisis-war-drives-fuel-prices-to-record-highs-e722df) — governments looking for other supplies are turning south. Algeria arrives as an established gas exporter, Egypt offers refineries and the Suez Canal, and Libya, in the assessment of Mohamed Eljarh writing for Al Jazeera, has suddenly recovered something it has not possessed for years: strategic relevance.

The raw material is real. Libya holds about 48 billion barrels of proven oil reserves, the largest in Africa, and produces 1.5 million barrels a day, with substantial gas besides. Its crude ships out through the Mediterranean and the Greenstream pipeline runs from the Mellitah complex to Europe. Eljarh’s argument is that this windfall can be a lever or a trap, depending on a choice Libyans have avoided before.

Consider first what the oil state delivers to its own people. More than 70 percent of Libyan gas production is burned at home, mostly for electricity, and still the lights go out: blackouts are routine. Gas exports have collapsed from around 200 billion cubic feet in 2019 to 35 billion in 2025, the lowest level in 22 years. At the same time the country flares at least 200 billion cubic feet a year — more gas burned off at the wellhead than it has managed to sell abroad in any recent year. The IMF estimates the energy-subsidy bill at around $17bn, roughly 35 percent of GDP, much of it spent importing refined fuel because Libya’s own refineries are too weak to meet demand. Around all of this sits the familiar wreckage: rival institutions, political fragmentation, periodic shutdowns when fighting interrupts the fields.

Here is the trap, in Eljarh’s telling, laid out when he addressed the 5th Mediterranean Energy Experts Circle earlier this month. Hungry buyers and higher prices would simply feed the old machine — ‘producing hydrocarbons, exporting them, distributing the revenues and postponing structural reform’. That model, he writes, keeps the state bolted to the resource curse: stagnation and inefficiency paid for in crude. Higher revenues spent the old way would secure Europe’s energy while leaving Libyans in the dark, and that, he warns, is a recipe for more instability.

His prescription is to spend the moment, not consume it: capture the flared gas, modernise power generation and transmission, expand refining where it pays, reform the subsidies, and put serious money into renewables. The state’s own National Sustainable Energy Strategy aims for 22 percent of electricity from renewable sources by 2035 — ambitious, he concedes, and hostage to security and governance.

The foreigners, at least, are keen. Libya’s first major licensing round since 2007 closed in February, with Chevron, Italy’s Eni, QatarEnergy, Spain’s Repsol, Hungary’s MOL, Nigeria’s Aiteo and Türkiye’s TPAO taking new licences. In energy, commercial and geopolitical interest are rarely fully separate, and Eljarh sees bargaining power in that — if Libyans manage it coherently, playing several partners against one another rather than serving as an arena where outsiders compete for individual assets.

The larger ambition is to make Libya a node in a Mediterranean energy system rather than an isolated wellhead. Egypt to the east has a big electricity system and refining capacity; Tunisia to the west opens toward the Maghreb and Europe. In January, Egypt and Libya signed an energy cooperation agreement covering exploration and refining, and the two are discussing an 800km pipeline from Tobruk to Alexandria, a $1bn project that would send Libyan crude to Egyptian refineries. Earlier this month the Libyan-Tunisian company Joint Oil opened an international round over roughly 3,000 square kilometres of shared offshore acreage, including the cross-border Zarat discovery; awards are expected by the end of April 2027.

Eljarh’s last caution is the sharpest, borrowed from the crisis itself: the Strait of Hormuz teaches what happens to those dependent on a single route. Regional integration must add alternatives — more markets, more power connections, more processing options, more export routes — not new dependence, and Libya still needs enough electricity, refining and production of its own to protect itself. That is the whole of it. The oil, the gas and the geography were always there. So was the decision, and Libya has postponed it for decades.