In the vast desert of North Africa, an oil giant is beginning to recover after years of conflict, war and uncertainty. With the largest oil reserves on the continent, Libya is once again capturing global attention thanks to a resurgence in its oil production. According to estimates by S&P Global Commodity Insights, Libya reached 1.17 million barrels per day in November (reaching a daily peak of 1.4 million on the best day in December), the highest level since October 2022. This increase shows that when the different factions that keep the country divided collaborate (or at least do not hinder each other ), Libya has great potential despite its political and social instability. One of the most notable Spanish companies is in a very good position to take advantage of this renaissance of Libyan oil, not only because it operates a large field in the country, but also because it has received permission to once again explore and search for crude oil… if there is nothing that will turn this ‘dream’ into a new ‘nightmare’ again.
The Spanish company Repsol plays a prominent role in this new stage. After a decade of suspension of activities due to conflicts in the country, lThe company resumed operations in the Murzuq basin (with permission from the Libyan authorities)beginning with the drilling of an exploratory well just 12 kilometers from the Al Sharara field, one of the largest in Libya. According to the National Oil Company (NOC), Repsol, along with other energy giants such as TotalEnergies and OMV, leads exploration and production efforts in a country that is committed to reaching 2 million barrels per day by 2028.
Libya’s potential is tremendous; if it were not for the political instability and the questionable management of its resources, the country could be a larger oil producer than it already is. The country has been a member of OPEC since 1962, it stands out as the nation with the largest proven oil reserves on the African continent. With 48,363 million barrels of crude oil under its soil (according to OPEC data), Libya not only leads in energy wealth, but also positions itself as a strategic player in global energy markets. This vast energy resource, combined with a relatively small population of 6.85 million, gives the country one of the highest GDP per capita in Africa, reaching $6,576 in 2023. A figure that could be much higher if the The country would not have fallen into a kind of endless war or conflict and the crude oil (both its exploitation and the distribution of the income it generates) would be managed in a more efficient way.
However, this resurgence is not without challenges. Libyan politics continues to be a chessboard full of uncertainty, where disputes between the governments of the east and the west, as well as the influence of international actors, define the future of the oil sector. As an analyst from Tripoli quoted by S&P Global explains, “understanding Libya’s politics in 2025 is understanding what will happen in the oil sector.” This year is set to be crucial, with key negotiations and tensions between figures such as Prime Minister Abdul Hamid al-Dbeiba and eastern leader Khalifa Haftar. However, S&P Global experts are somewhat more optimistic than in past years, since it seems that the factions are determined to dialogue.
A sector under constant tension
The oil, which represents 93% of the Libyan government’s incomehas historically been both a blessing and a curse for the country. Production interruptions are frequent, as demonstrated in 2024 with blockades of the Sharara and El-Feel fields, ordered by rival factions. According to S&P Global, these episodes, such as the stoppage of more than five weeks last August, had a significant impact on international markets, raising the differentials of Mediterranean crude oil.
Despite these tensions, the oil industry is moving forward. ANDIn December 2024, the NOC reported that production reached 1.42 million barrels per day on a specific day, although analysts question the sustainability of these figures. International companies have shown renewed interest in the country, with Repsol at the forefront. According to the NOC, the Spanish energy company has been a pillar in exploration and production since the 1970s, and its current operations, managed through Akakus Oil Operation, are essential to stabilize production.
Repsol: a key player in the Libyan awakening
Repsol’s return to Libya is no coincidence. The Murzuq basin, where the company has restarted its activities, is one of the areas with the greatest potential in the country. However, Repsol has suffered firsthand the vagaries of Libyan politics, with recurring blockades that paralyzed its operations in Al Sharara, a critical field for its activities. Despite this, the Spanish company maintains its commitment to the energy development of Libya, trusting that political stability will allow it to consolidate its projects.
Libya’s potential also attracts other international players, such as Italy’s Eni and France’s TotalEnergies. However, according to S&P Global, geopolitical tensions, including Turkish ambitions in the region, could add complexity to the negotiations. Türkiye, which sent troops in 2020 to support the government in Tripoli, is seeking to expand its influence in the oil sector, which could cause friction with European companies.
An uncertain but promising future
The Libyan oil sector finds itself in a delicate balance between progress and risk. The recent fall of Bashar al-Assad in Syria, with its impact on Russia’s regional influence, could alter the balance of power in Libya, favoring actors like Türkiye. This scenario, according to S&P Global, highlights the fragility of a country divided between rival administrations competing for control of key resources such as oil.
Despite these challenges, optimism does not disappear. “Libya is showing signs of improvement,” said Hamish Kinnear, analyst at Verisk Maplecroft. The return of companies like Repsol and the increase in production are indicators of a sector that, despite the difficulties, remains vital for the Libyan economy and for the global energy supply.
In parallel, the NOC tries to project an image of stability with ambitious objectives. The state company has set the goal of reaching 2 million barrels per day in 2027, a monumental challenge that will depend both on the resolution of internal conflicts and on foreign investments.
The awakening of the African giant is a story of resilience and opportunity. In a world where energy is increasingly strategic, Libya holds the key to transforming its vast reserves into an engine of development. However, the path is littered with obstacles. Companies like Repsol, which are betting on the Libyan future, are a reminder that oil, although valuable, is only useful if it is managed with vision and stability.
The international impact of this resurgence is also notable. Libya exported 1.1 million barrels a day of crude oil to Europe in November, reinforcing its role as a strategic supplier to the region. Its highly coveted light, sweet oil becomes a diplomatic weapon that the country could use to strengthen its position on the global stage.
In the sands of the desert and the offices of Tripoli, the future of Libya is written every day. With the largest crude oil reserves in Africa and immense potential, the country has the opportunity to establish itself as a key player in the global energy industry. The question that remains is whether it will manage to overcome its internal divisions and build a legacy that benefits all its citizens.
With international actors like Spain, Italy and Türkiye Competing for its share of the energy pie, the Libyan board resembles an intricate geopolitical puzzle. The key will be to find a balance that allows the country not only to stabilize its oil industry, but also to transform that wealth into sustainable development for its population.
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