Overview
Representatives from the US, Egypt, Saudi Arabia, and Türkiye met in Cairo last week to discuss proposals aimed at resolving Libya’s political crisis. The country’s energy sector has shown signs of recovery but remains vulnerable to persistent instability and corruption. Insecurity has facilitated the cross-border movement of terrorists and arms, exacerbating jihadist insurgencies across Africa. Against this backdrop, the US and regional powers have sought to broker peace between the rival governments in Tripoli and Tobruk. A successful power-sharing agreement could position Libya as a key energy producer and counterterrorism partner. But past peace initiatives unraveled as opposing factions, prioritizing their interests and emboldened by foreign backers, prolonged conflict. Failure to broker a lasting settlement could reverse recent gains in oil production and discourage foreign investment. Moreover, long-term instability could enable the expansion of the Islamic State.
Background: Key Players in Libya’s Dual Governments
Various Islamist and secular factions emerged following Muammar Qaddafi’s ouster in 2011. Efforts to establish a unified government failed, contributing to two civil wars and the creation of parallel governance structures. In eastern Libya, military power is concentrated in the hands of Khalifa Haftar and the Libyan National Army (LNA), while political authority is formally exercised by the Tobruk-based Libyan House of Representatives and its allied Government of National Stability (GNS). In western Libya, the internationally recognized Government of National Unity (GNU) is led by Prime Minister Abdul Hamid Dbeibah in Tripoli. Both sides claim legitimacy but have failed to hold long-promised presidential and parliamentary elections, which were originally scheduled for December 2021.
US Interests and Peace Proposal, Explained
US attention to Libya’s political structure generally waned as the political stalemate between eastern and western authorities became entrenched. However, the Trump administration has shown renewed interest in brokering a permanent settlement. Washington’s strategic interests are largely economic in nature. Energy security is a central pillar of this approach, elevating the strategic importance of Libya’s oil reserves, the largest in Africa. In February, Libya’s National Oil Corporation awarded oil and gas exploration blocks to foreign companies for the first time since 2007. Libya also signed a 25-year development deal with US and French energy companies to invest an estimated $20 billion to boost oil production by as much as 850,000 barrels per day. In addition to expanding energy cooperation, delegations from Tripoli met with US officials to discuss financial reform and minerals agreements. Libya’s energy sector is steadily rebounding as foreign companies expand their presence, but Washington is concerned that future political fallout could halt rising production and foment insecurity.
As jihadist insurgencies intensify in the Sahel, the US views stability in Libya as critical to curbing regional arms trafficking and extremist recruitment. Although the Islamic State’s presence in Libya is much smaller than in other African nations, it maintains cells that fuel regional conflicts. Last year, four cells tasked with moving fighters from Europe into the Sahel and Somalia were dismantled in Libya. The group also sought to establish sleeper cells within the country, raising the risk of a resurgence after past counterterrorism operations dismantled its stronghold in Sirte.
To advance these interests, US Senior Adviser on African Affairs Massad Boulos presented a roadmap last month toward a single national budget, unifying government and military institutions, and holding elections. Following engagements between Boulos and both governments, Libya approved its first state budget in more than a decade, an important step towards implementing the framework. On the security front, eastern and western security forces both participated in AFRICOM’s Flintlock exercise for the first time. Fostering interoperability not only strengthens the country’s counterterrorism capabilities but also normalizes cooperation in preparation for a unified military.
The Decline of Middle Power Competition
Egypt, the UAE, and Saudi Arabia initially had opposing strategic interests to Türkiye. Seeking to prevent an Islamist government, Egypt trained eastern Libya’s LNA and was a major supplier of arms during the civil wars. The UAE also backed Haftar to combat the expansion of political Islam, allegedly supplying weapons. Concerned by Türkiye’s growing influence in Libya, Saudi Arabia likewise supported Haftar, though its role was more limited compared to Cairo and Abu Dhabi. Substantial foreign backing emboldened Haftar to resist making meaningful political concessions. By contrast, Türkiye became a longstanding ally of the Western government, intervening in late 2019 and early 2020 to prevent Haftar from seizing Tripoli. Ankara deployed drones, electronic warfare systems, and Syrian fighters to the battlefield, a decisive move that pushed out the LNA and effectively froze the conflict.
Following the failed LNA offensive, dynamics have changed significantly as actors have increasingly shifted to a hedging strategy. Evolving economic and security interests drove this recalculation. Seeking a more stable Libyan economy that can attract investment, absorb Egyptian labor, and export energy, Cairo has reassessed its relationship with Haftar. This shift has been further shaped by allegations of Haftar’s links to the Rapid Support Forces, the paramilitary group that is vying for control of Sudan and has destabilized Egypt’s southern border. Meanwhile, Ankara began engaging the Haftar family to secure support for Turkish business ventures and access to oil and gas deposits along the eastern Mediterranean. Intensifying Saudi–Emirati competition in Yemen and Sudan has reduced their focus on Libya, leading both to increasingly support a political settlement.
Key Obstacles to Political Stability
Declining foreign intervention, and particularly reduced military aid, has increased the prospects for a power-sharing agreement. Yet significant obstacles to implementation remain. Political figures in Tripoli and Haftar have both expressed interest in Boulos’ proposed framework, but this is not the first time they have done so. Previous peace initiatives failed or stalled because of underlying and conflicting interests among political and military factions. Disputes over political authority and the distribution of oil revenues have repeatedly undermined past agreements.
Moreover, not all parties within the Western government have agreed to the roadmap. Many political and security leaders reject sharing power with the Haftar family and oppose involvement from external actors in the peace process. In the east, reports indicate that a power struggle is emerging among Haftar’s sons. These dynamics highlight a central challenge facing the framework: as tribal, familial, and political loyalties outweigh incentives for compromise, key stakeholders continue to view power-sharing as a threat to their influence rather than a path to stability.
A Unified Libya is Possible, But Risks Remain
Boulos’ framework may offer a route toward greater institutional integration and certainty. The Trump administration’s peacemaking approach is to interlink economic and infrastructure investment with political reform, which could derisk foreign involvement in the energy sector and help stabilize global energy markets. But even if a power-sharing agreement is reached, Libya's long-term stability will depend on the creation of durable and transparent institutions. Absent such reforms, the country's energy sector will remain vulnerable to political patronage. Militias and political factions have repeatedly used oil fields and export terminals as leverage to extract concessions and secure rents. In August 2024, for example, a dispute over central bank authority led to the shutdown of multiple oil facilities, taking more than half of Libya's oil production offline for several weeks.
As long as control over energy revenues remains contested, the use of energy infrastructure as a bargaining chip is likely to persist. Significant disruptions to Libya's energy sector would interrupt production by American, Italian, and Qatari energy companies operating in the country. This, in turn, could reduce the global oil market's spare production capacity, leaving it less able to absorb future supply shocks. A prolonged shutdown would further limit the market's ability to stabilize prices should disruptions arise from renewed conflict with Iran.
Continued political fragmentation would also undermine Libya's investment climate. Foreign companies already face significant obstacles, including widespread corruption, contractual uncertainty, and weak legal protections. Without greater institutional cohesion, these challenges are likely to intensify, increasing the costs of doing business in the country. Security risks remain equally significant. Islamic State affiliates continue to exploit Libya's fragmented security landscape, while gaps in coordination between rival authorities facilitate the movement of fighters and illicit networks across the region. Failure to unify state institutions could create opportunities for extremist groups to rebuild their presence, threatening both Libya's stability and broader regional security.
