Libya Energy Insights (September 2025)

Market Outlook

Libya’s market outlook remains defined by a sharp contrast between promise and peril. On paper, the country holds some of the world’s most attractive energy assets: vast untapped reserves, low production costs, and natural advantages in solar that could support ambitious diversification.

International oil companies are re-engaging, global buyers continue to value Libyan crude, and international partners show interest in financing infrastructure and renewable energy. Yet these opportunities are undercut by structural fragility.

Political fragmentation, competing claims over the National Oil Corporation, intermittent security crises, and a chronically unstable electricity sector keep Libya firmly in the category of high-risk destinations.

Without a durable political settlement and institutional reform, market engagement will remain opportunistic and vulnerable to sudden reversals, leaving the country’s considerable potential only partially realised.

Key Highlights

• The permanent appointment of Masoud Suleiman as NOC chairman may ease tensions temporarily, though rival factions remain entrenched.
• International oil companies are returning but risk underestimating Libya’s volatile security and political environment.
• Security in western energy hubs such as Zawiya remains fragile, underscoring the vulnerability of critical infrastructure.
• Eastern authorities have launched large-scale rehabilitation projects to stabilise the electricity grid, while western Libyan responses remain limited and ad hoc.
• Libya has vast renewable energy potential, yet progress toward its target of 30% renewable energy in the mix by 2035 is slow and hampered by fragmentation.
• External markets are shifting: Indian refiners and French oil buyers are strengthening ties, while Italy reduces gas imports, reflecting changing European energy strategies.
• Unresolved maritime disputes with Egypt and Greece cloud offshore exploration prospects and raise geopolitical risks.
• Overall, Libya remains a high-risk but high-potential destination, with opportunities tempered by political instability, weak governance, and shifting global energy trends.

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