Archive - April 2026

Salah El Houni

There is need for a domestic political conviction that the cost of continuing to use oil to fuel conflict has come to outweigh any gains reaped by all parties involved.

There is a stark paradox that encapsulates the entire Libyan predicament: this is a country that possesses the largest proven oil reserves in Africa while being unable to finance its regular budget. Its national oil company has even accumulated a debt exceeding 31 billion dinars in just three years. These figures, revealed in official documents submitted by the National Oil Corporation as part of its 2026 financial report, do not merely point to a budget crisis. They are rather a symptom of a deeper malaise that has plagued the Libyan state for over a decade, and which consists in the misuse of oil resources to fuel division.

At first glance there may seem there is reason to hope. After years of repeated shutdowns and losses exceeding $100 billion since 2011, Libya recorded its highest oil production level in a decade in 2025, averaging nearly 1.4 million barrels per day.

In February 2026, the National Oil Corporation announced its first bidding round in nearly two decades, which was won by companies like Chevron, Eni, Qatar Energy, and Repsol—an undeniable sign of renewed international confidence in Libya’s oil wealth.

But behind this statistical veneer lies a harsher reality: the relative stability which the sector enjoys today is not the fruit of institutional reform, but rather a fragile equilibrium born of a temporary convergence of interests among competing powers—a equilibrium that could collapse after a single decision or a single security incident.

The true nature of the crisis is now documented in international testimonies with undeniable credibility. A report by the UN Security Council’s Panel of Experts revealed a systematic looting activity taking pace through Libyan ports, where the Arkenu Oil Company was, for instance, used as a front to divert more than three billion dollars outside official channels between January 2024 and November 2025 alone. The report explicitly states that both Tripoli and Benghazi rely on smuggling networks as a strategic means to finance arms purchases, in blatant violation of an international embargo that has found no effective enforcement.

What makes the situation even more painful is that Libya does possess adequate technical oil knowhow. The National Oil Corporation (NOC) boasts genuine engineering and management expertise, its international partners believe in its production capacity, and figures prove that operational efficiency is not the problem. The problem lies in who controls the revenues and where the oil income goes. When oil revenues are systematically diverted to armed groups and militias instead of the national treasury, the NOC is transformed from a backbone of national development into an instrument of division.

As part of this paradox, the very same enormous oil revenues that are supposed to finance reconstruction and modernisation of infrastructure are now helping each side cling to its political position hence perpetuating chronic division. In other words, oil is not funding stability; it is funding instability.

The impact of this odd situation is not confined to within Libya’s borders. The rise and volatility of Libyan production directly impact global oil markets, particularly Europe, which imports a significant portion of its light, low-sulfur crude from Libya. In the context of the current energy crisis gripping Europe due to disruptions in the Strait of Hormuz, the strategic importance of Libyan oil is greater than ever. This means that the interest of European partners in ensuring the institutional stability of the Libyan oil sector has never been clearer. However, this interest does not appear to have translated into genuine political pressure beyond the usual diplomatic pronouncements.

A fundamental solution does hinge on new investments or more advanced technology. What Libya needs is what it has lacked so far: a unified governance institution to oversee oil revenues and their distribution transparently while transcending political divisions. It needs a joint account into which revenues flow away from existing regional alignments. This is not a new idea.  This notion was floated in numerous negotiations and was included in successive roadmaps, but was never implemented because those who control the oil do not want to be held accountable.

There are a few indications, however, showing that change is possible. Drawing major international companies like Chevron and BP to Libya brings to the table international stakeholders with direct interest in institutional stability, and wielding the type of influence that Arab governments and the international community involved in the negotiations have lacked. When Chevron invests billions of dollars it does not do so without genuine institutional guarantees.

However, this optimistic scenario remains contingent on one fundamental condition: that the will of local actors shifts from exploiting division to investing in oil. This condition cannot be met by external pressure or foreign investment alone; rather, it requires a domestic political conviction that the cost of continuing to use oil to fuel conflict has come to outweigh any gains reaped by all parties involved. All indications suggest that this conviction has not yet matured. Until it does, Libyan oil will remain a squandered resource instead of a tool for construction.

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The Sentry

Undue Influence Over Commercial Banks

Exploiting The Weakness of Dinar Banking

In eastern Libya’s commercial banks, where Gadalla holds sway, standard banking procedures are often subverted. Behind Gadalla stands the Haftar family’s political and coercive power, while the CBL in Tripoli has tended to quietly absorb the resulting financial abuses.

Two scandals that illustrate this trend burst into public view in the spring of 2024. In May 2024, Wahda Bank experienced a large and unusual disruption amid what commentators called the “zero-clearing incidents.”

In a scheme that involved 151 accounts, including 10 corporate accounts, Wahda Bank issued certified checks—totaling about 300 million dinars ($55 million)—through manual processing, meaning the CBL’s electronic clearing system was not used.

Later, when the transactions were processed through the CBL’s central system, it turned out that the Wahda Bank accounts behind the checks lacked sufficient funds.

The CBL suspended the suspicious accounts at Wahda Bank but maintained a low-disclosure posture, neither publicly denouncing nor explaining the incident.

Forcing the Benghazi bank to absorb the 300 million dinars would have destabilized the institution and threatened salary payments to innocent families in eastern Libya.

Beyond the archaic character of the CBL’s checks and balances, the May 2024 Wahda Bank incident reflects Gadalla’s influence over eastern Libya’s banking sector.

Indeed, multiple sources interviewed by The Sentry mentioned Gadalla’s tacit control over the institution at the time of the “zero-clearing incidents.”

Gadalla also sits on Wahda Bank’s board of directors. Wahda Bank did not respond to The Sentry’s request for comment.

Another irregularity, which occurred in April 2024, involved letters of credit. A whistle‑blower from the National Commercial Bank sent a file to the CBL in Tripoli proving that letters of credit worth 400 million dinars (about $88 million at the time) had been approved, even though the applicants never lodged the matching dinar balances.

The paperwork featured the Turkish-based company of Zliten-native and businessman Fauzi “Abudaghel” al-Muqla, who is married to the sister of Saddam Haftar’s wife.

Muqla’s privileged standing within the Field Marshal’s family let him skip key safeguards: the bank ignored the missing dinar deposit.

This letter-of-credit abuse took place against a backdrop in which the National Commercial Bank was already under Gadalla’s sway, according to several sources familiar with eastern Libya’s banking sector.

As millions of dollars flowed to the Turkish entity’s dollar accounts at al-Masraf in the UAE, Saddam Haftar’s circle reaped foreign currency without even having to put up the corresponding dinar amount upfront. Neither Muqla nor the National Commercial Bank responded to The Sentry’s requests for comment.

Both Ends of the Wire

The abuse of letters of credit—a persistent feature of Libya’s financial landscape for more than a decade—has intensified since 2022. The deterioration has affected commercial banks in both eastern and western Libya, but those headquartered in the northeast present a distinct concern.

Gadalla exerts control on both ends of the letter-of-credit circuit. In addition to his authority over eastern Libya’s main banks, he reportedly requires foreign-based entities seeking letter-of-credit proceeds from Libya to open U.S. dollar accounts at al-Masraf.

Straddling Benghazi and Dubai, Gadalla extracts informal commissions on dollar outflows originating from the CBL to the UAE.

Such concentration of power in the hands of a single individual represents a threat of a different order. It contributes to accelerating the depletion of Libya’s dollar reserves and obstructs legitimate trade, as lawful importers are forced either to pay the informal commissions or to exit the market entirely.

It also weakens anti-money laundering enforcement. With both the previous and current CBL governor reluctant to denounce banking scams in eastern Libya, the boundary between legitimate and illicit finance has grown blurrier, leaving Haftar’s faction wealthier and the dinar ever more vulnerable.

Chinese Drones Scandal

Gadalla’s illicit activities extend beyond the banking sector and beyond Libya, with companies under his control also serving as vehicles for arms smuggling and other questionable transnational endeavors.

In April 2024, Canadian authorities revealed a conspiracy involving at least two Libyan employees of the International Civil Aviation Organization (ICAO), a UN agency based in Montreal. The investigation found that the two individuals had participated in a broader scheme meant to facilitate the procurement of Chinese-manufactured combat drones for the Haftar family in Benghazi.

Stages of the acquisition program were financed not through monetary payments but through illicit oil schemes such as deliberate discounts on NOC crude sales to Chinese oil firms.

Notably, one of Gadalla’s Dubai‑registered companies paid for the sea transport of the drones, tying him to the operation. The breadth of this maneuvering was made clearer in January 2025, when the Canadian press revealed that the Federal Bureau of Investigation (FBI) had quietly arrested Chinese national James “Kuang Chi” Wan, a former ICAO employee with suspected links to Beijing, as early as January 2023. Although Wan was detained at Seattle-Tacoma International Airport two years earlier, his case remained under seal until reporting established that he was suspected of participating in the same attempted sale of more than $1 billion worth of armed drones and other materiel from China to eastern Libya.

According to the FBI complaint attached to the arrest paperwork, Wan told investigators that one of the co-conspirators was a special advisor to Chinese President Xi Jinping.

Even if that claim remains unproven, the mechanics of the scheme point to senior-level coordination in both Beijing and Benghazi: Libya’s NOC sold crude oil to Unipec in August 2022 at an abnormal discount, creating a de facto transfer of wealth from Libya to a Chinese state-linked buyer.

As for the drone supplier, FL-1 drones manufactured by state-linked Zhongtian Guide Control Technology Co., were shipped from Qingdao to Benghazi in March and April 2024 as part of the same arrangement.

This coordination is consistent with what Canadian prosecutors described as an illicit “commercial entente” in which senior LAAF commanders sought to exchange NOC oil for Chinese military technology.290 Such a transaction could not have proceeded without the approval of the Haftar family, above all Saddam Haftar.

The LAAF did not respond to The Sentry’s request for comment. The large FL-1 combat drones, disguised as wind turbines, were intercepted in southern Italy in June 2024.

Under UN Security Council Resolution (UNSCR) 1970, any transfer of arms, related materiel, or military-use equipment to Libya without prior approval from the 1970 Libya Sanctions Committee is a violation of the UN arms embargo and international law.

The FL-1 transfer attempt appears to have violated that embargo. The co-option of the NOC to facilitate the circumvention of the UN arms embargo was not an isolated occurrence during Benqdara’s NOC chairmanship from 2022 to 2025.

In a separate episode, the Haftar family utilized the NOC to secure the services of an Irish private military contractor.

Spanish Drones Scandal

In 2023, Spain’s Guardia Civil and French police intercepted illicit arms shipments valued at 14 million euros ($16.4 million). The materiel—comprising 44 drones, thermal cameras, helmets, and other military equipment from Spanish manufacturers Shadow Lynx, Aeronáutica DTS, and DUMA Engineering—was intended for Saddam Haftar in Benghazi.

The Spanish authorities later made it publicly known that they had arrested a Libyan national and four Spaniards involved in a plan to violate the UN arms embargo. Yusef al-Ubeidi, the Madrid-based individual suspected of having helped coordinate the arms purchase, told investigators that Gadalla, acting for Saddam Haftar, was involved. According to the Spanish press and a senior Spanish official with knowledge of the scheme, one of Gadalla’s Dubai firms played a role in the scheme, which included wiring 14 million euros to the Spanish firms as part of a documented plan to ship the equipment to eastern Libya.

Maritime Smuggling

In 2025, an arms smuggling incident off Greece implicated Gadalla and UDS Shipping Services, a Dubai maritime company under his control. The episode was tied to the weapons pipeline Saddam Haftar established after the outbreak of civil war in Sudan in April 2023, turning Benghazi into a major transit hub for weapons supplied by the UAE and destined for the RSF in western Sudan’s Darfur region.

In late July 2025, the Alushibe Group’s 475-foot container ship, the Aya 1, lifted 350 containers filled with ammunition and about 200 large military-use vehicles from the UAE and headed for Benghazi.

The maritime transfer, ultimately intended for the RSF in Sudan, was intercepted off Crete by Greek and Italian patrol boats enforcing the UN arms embargo on Libya. A search at a Greek port revealed the military-use vehicles despite a manifest claiming the ship was carrying cosmetics and electronics to the Netherlands.

Still, the maritime officers released the Aya 1 without confiscating the thousands of tons of military-use hardware. One possible explanation for Greece’s leniency is that, in the summer of 2025, Crete was facing a surge in irregular migrant arrivals from eastern Libya, an area under Haftar family control.

In the months following the Greek government’s decision not to seize the entire shipment, its relations with eastern Libya’s leaders improved. Gadalla didn’t respond to The Sentry’s request for comment. EU authorities documented the incident, which likely violated UN arms embargoes on Libya and Darfur.

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Andrea Cellino

How EU technocratic policy in Libya erodes influence, enabling rival powers to shape the country’s political and security landscape

Fifteen years after the fall of Muammar Gaddafi, the European Union remains Libya’s largest donor — but a marginal political actor. By prioritizing technocratic interventions over strategic engagement, Brussels has ceded ground to actors like Russia, Turkey, and the United Arab Emirates, who now shape realities on the ground.

This commentary examines how EU migration policies, fragmented assistance, and diplomatic retreat have undermined its leverage while reinforcing problematic local power structures. It argues that without a decisive shift toward a coordinated political strategy, the EU risks permanent irrelevance in a region central to Mediterranean stability.

Fifteen years after the fall of Gaddafi, the European Union finds itself in a paradox of its own making in Libya. It is the country’s largest donor, having channeled hundreds of millions of euros through the EU Emergency Trust Fund for Africa (EUTFA) and the NDICI-Global Europe instrument, and yet it wields almost no political influence over Libya’s future.

Brussels has a naval mission in the Mediterranean, trains coastguard forces, funds rule-of-law programs, and finances skills development schemes — and yet Russia maintains a permanent military footprint in the country’s east, Turkey retains troops and bases in the west, and the UAE continues to back Khalifa Haftar’s Libyan National Army with arms and political support. The EU, in short, has traded geopolitical relevance for the comforting illusion of technical manageability.

From Mediator to Manager

The turning point came gradually. After the Berlin Conference of January 2020 — the last instance when the EU genuinely tried to convene the major actors around a common roadmap — Brussels allowed its diplomatic ambitions to wither. The UN-brokered Government of National Unity (GNU) that emerged from the Libyan Political Dialogue Forum in February 2021 offered a convenient exit: Responsibility for the political process was handed entirely to UNSMIL, while the EU settled into the role of a supporter and service provider.

The Russian invasion of Ukraine in February 2022 sealed this retreat, dramatically reshuffling the EU’s strategic priorities and providing institutional cover for what had already become a policy of deliberate depoliticization. EU officials with direct responsibility for the Libyan file have since confirmed that the step back from political engagement was a conscious choice, driven by persistent divisions among member states that made any common political position effectively impossible to agree upon.

What followed was an acceleration of the technocratic turn. The EU’s assistance, channeled through UN agencies (UNDP, IOM) or national cooperation managers (GIZ, Expertise France), concentrated on high-visibility, rapidly measurable interventions: de-mining, infrastructure rehabilitation, local governance support, civil society hubs in municipalities.

The most recent Special Measure for 2024 — the latest iteration of this approach — allocates €7.15 million to a private-sector skills program and €8 million to a justice and rule-of-law project, which the High Representative Kaja Kallas described as targeting “juvenile justice, rule of law institutions, and the fight against corruption.”

These are not trivial activities. But they are also not a strategy. The European Court of Auditors noted in 2024 that EU support to Libya had remained “not sufficiently targeted,” distributed across too wide a range of actions without a clear hierarchy of priorities. The head of the audit, Bettina Jakobsen, was more blunt: The result was “fragmented support with little focus on strategic priorities” that “fails to produce an impact.”

Migration Externalization and

Its Political Costs

Nowhere is the technocratic evasion more consequential — or more contradictory — than in the field of migration management. The EU has, since 2017, built an elaborate architecture of border externalization: It funds, trains, and equips the Libyan Coast Guard (LCG) in exchange for intercepting migrants before they reach European waters. This arrangement has been dressed in the neutral language of “capacity-building,” “integrated border management,” and “SAR coordination,” obscuring the political choices it entails.

The humanitarian costs of this approach are now beyond reasonable dispute. The UN Human Rights Council’s Independent Fact-Finding Mission on Libya concluded in March 2023 that there are “reasonable grounds to believe” that systematic abuses in detention centers — including torture, sexual violence, forced labor and extortion — reach the threshold of crimes against humanity, and that the EU’s support for interceptions has indirectly contributed to these crimes.

The LCG units that EU resources help equip are linked to militias that profit from the detention system through embezzlement of state funds, release payments, and forced labor. Far from dismantling this system, EU cooperation has strengthened its actors, providing them with institutional cover and resources that enhance their bargaining power vis-à-vis both the Libyan governments and European partners.

The geopolitical costs are less discussed but equally serious. By subordinating every other interest to migration containment, the EU has progressively legitimized actors it previously kept at arm’s length. The most striking recent example concerns Haftar’s forces in eastern Libya. From mid-2022 onwards, thousands of migrants began departing from eastern Libya, with Haftar’s forces actively orchestrating the embarkments. Italy and Greece responded by opening political channels to the Haftar clan and initiating training programs for the Libyan National Army.

In July 2025, EU Commissioner for Migration Magnus Brunner led a high-level delegation to Benghazi — only for Haftar to expel it when his demand to include ministers of his parallel, unrecognized government was refused. Rather than marking a clean break, the incident was followed by a Frontex and Commission visit to Warsaw and Brussels of Libyan officials from both governments in October 2025 — the first time Haftar’s representatives had been formally received by EU institutions. And in January 2026, it emerged that the EU is planning a maritime rescue coordination center in Benghazi, with initial funding of €3 million, which would provide Haftar’s coastguard with an operational base and, crucially, significant international legitimacy.

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Andrea Cellino is Vice President at MEIS, the Middle East Institute Switzerland, and Non-Resident Executive Fellow at GCSP, the Geneva Centre for Security Policy. 

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Rawad M. Shalabi

Inflation may be a global phenomenon, but in Libya its drivers and consequences are uniquely shaped by oil revenues, import dependence, and state spending. While many economies have struggled with rising prices since the COVID-19 pandemic and the war in Ukraine, Libya’s official inflation figures have remained relatively low. Yet beneath this apparent stability lies a more complex reality, one where exchange rates, subsidies, and hydrocarbon income play a decisive role in shaping price dynamics.

Understanding inflation in Libya therefore requires looking beyond headline figures. It is not only a question of global shocks, but of how oil revenues are managed, how heavily the country relies on imports, and how fiscal policy responds to external pressures. In this context, inflation becomes more than an economic indicator, it becomes a reflection of Libya’s broader economic structure and policy choices.

Libya’s inflation story, however, doesn’t follow the same pattern as many other countries. Official figures placed inflation at around 2 percent in 2024, with the IMF later adjusting it to 2.4 percent for the first quarter of 2025 after addressing measurement gaps. Meanwhile, the Central Bank of Libya maintained relatively low rates: a rediscount rate of 3 percent, 91-day deposit certificates at 1 percent, and an overnight facility at 0.25 percent in early 2025. On paper, inflation appears contained, but beneath the surface, pressures remain.

This is where Libya’s dependence on oil becomes critical. According to the IMF, the economy remains highly exposed to global shocks because of its reliance on hydrocarbon exports and its large import bill. The current account shifted from a strong surplus in 2023 to a deficit in 2024, as export revenues declined while imports stayed broadly steady. Fuel imports alone surged dramatically, from an average of $3 billion between 2016 and 2019 to $9 billion in 2024, based on data from the Libyan Audit Bureau cited by the IMF.

For Libya, inflation is not simply a matter of consumer prices. It is deeply tied to oil revenue cycles, subsidy policies, and broader fiscal pressures. By late 2024, fuel subsidies had reached 12.8 billion Libyan dinars between January and November, even as gasoline remained priced at just 0.150 dinars per liter, among the lowest globally. The IMF estimates that energy subsidies account for roughly a quarter of GDP, underlining the significant strain they place on public finances.

The political dimension of inflation is just as significant. When prices rise, the impact is immediate and visible, and governments face pressure to respond. That response often comes in the form of increased subsidies, cash transfers, or tax relief. While such measures can ease short-term pressure, they also risk widening fiscal deficits over time. In Libya, where political divisions already complicate spending control and reform efforts, the link between inflation and fiscal policy becomes even more pronounced.

Central banks around the world have been navigating a delicate balance: reducing inflation without stifling growth. In many cases, this has meant raising interest rates to cool demand, even though higher borrowing costs affect governments, businesses, and households alike. Libya’s situation differs in structure, but the underlying reality is similar, monetary policy cannot be separated from fiscal constraints and political dynamics.

Exchange rates add another layer to the picture. In April 2025, Libya devalued its currency by 13.3 percent, setting the official rate at 5.5677 dinars to the dollar. For an economy heavily reliant on imports—from food to fuel to consumer goods—such a move has direct consequences. A weaker currency can quickly translate into higher local prices, even when headline inflation figures appear stable.

Globally, energy prices remain central to the inflation story. Brent crude averaged around $80.12 per barrel in 2024, according to the U.S. Energy Information Administration. For oil exporters like Libya, this directly shapes government revenues. For import-dependent economies, it drives inflation. The same market dynamic can therefore strengthen public finances in one country while deepening the cost-of-living crisis in another.

What makes inflation particularly sensitive politically is its uneven impact. Lower-income households are hit hardest, as they spend a larger share of their income on essentials such as food and energy. As a result, inflation often becomes less about macroeconomic indicators and more about fairness, trust, and social stability. When governments fail to cushion the impact, economic strain can quickly evolve into political pressure.

Ultimately, the recent inflation wave has done more than push prices upward. It has exposed structural weaknesses in the global economy, forced countries to rethink energy and food security, and highlighted the risks of overdependence. For Libya, the lesson is clear: inflation is not only driven by global forces but also by domestic choices—how oil revenues are managed, how reliant the country remains on imports, and how resilient its public finances are. Today, more than ever, the line between economics and politics is impossible to ignore.

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Khaled Mahmoud

This month, the United States launched its annual “Flintlock” military exercises in Libya for the first time. For the U.S., these multinational drills represent an opportunity to limit Chinese and Russian influence in the country and a “significant step forward for military integration in Libya,” which has been divided into dueling governments in the east and west for the past decade.

Field Marshal Khalifa Haftar, the strongman of eastern Libya and a former CIA asset, is hoping to use this moment to cement his grip on power. The military leader has over the past decade become a leading figure in Libyan politics, owing in large part to his control over military and energy infrastructure throughout the country.

But, at the advanced age of 82, he has been relegated to the role of kingmaker behind the curtain, positioning his sons to carry on his legacy and solidify the family’s control over Libya. If he succeeds, he could well reproduce the experience of his predecessor and rival, the late Col. Muammar Gaddafi, who led the country for more than 40 years before being unseated and killed in 2011.

Flintlock 2026

Earlier this month, Massad Boulos, senior adviser to President Donald Trump for Arab and Middle East affairs, persuaded the Libyans to put a temporary end to their east-west rivalry through an agreement on unified spending between the two competing governments: the Government of National Unity based in the capital Tripoli under Prime Minister Abdul Hamid Dbeibah, and the parallel Government of National Stability led by Osama Hammad, which is backed by Haftar.

The “Flintlock 2026” maneuvers, which are sponsored by AFRICOM and involve about 1,500 troops from 30 countries, are bringing together forces from eastern and western Libya for the first time. Boulos placed the exercises at the heart of the political process, describing them as an opportunity to “raise the professionalism of Libyan officers.”

In practice, this represents an American imprimatur for entrenching Haftar’s dominant role in Libyan politics and elevating his family from warlords to international security partners. Saddam Haftar, Khalifa Haftar’s son and deputy, was, after all, seated next to Lt. Gen. John Brennan, the deputy commander of AFRICOM, during the exercises.

Many Libyans question the usefulness of these initiatives, seeing them as nothing more than a temporary painkiller, proof that American efforts are not a solution to the crisis but merely a way of managing it. While the effort to unify the state budget brought a temporary reprieve, it did not resolve the root causes of the power struggle.

It seems that the debt of history still governs Washington’s view of Libya. After the phrase “to the shores of Tripoli” that echoes in the U.S. Marine Corps hymn, American forces have returned once again to the Gulf of Sirte.

Sirte: Former ‘line of death’

Sirte, which the Reagan administration bombed in 1986 under the pretext of dismantling Gaddafi’s regime, is now welcoming AFRICOM officers there to bless the birth of a new military dynasty led by Haftar’s sons.

For the first time, Libya appears as the official host of these joint operations. Brennan described the step as embodying “the vision of leaders from both sides.” Yet the irony lies in transforming Sirte from a geopolitical “line of death” for the former Libyan regime into an attempt to reproduce the “strongman” model that Washington has long claimed it seeks to dismantle.

Former Libyan Defense Minister Mohammed al-Barghathi believes the scene carries many contradictions. In an interview, he said: “As much as it pleases us to see Libyan officers meeting together, it hurts in our souls that this invitation is taking place on their own soil and under the management of an external party, under the pretext of unifying the military institution.”

In the same conversation, al-Barghathi questioned Washington’s credibility, recalling previous promises by U.S. defense secretaries to install electronic surveillance systems on the southern borders and to hand over four Libyan aircraft held by the United States since the 1969 coup that brought Gaddafi to power. “Those aircraft have today become military scrap after decades beyond their operational life,” he added bitterly, “and American promises never went beyond words that were never fulfilled on the ground.”

The return from exile

Haftar emerged as one of Libya’s most important political actors since he launched Operation Dignity in 2014, launching a military offensive that unseated an Islamist government in Benghazi, the largest city in eastern Libya.

Hafter allied himself with the House of Representatives, a body elected in a national vote in 2014 that would later endorse the Government of National Stability. This relationship helped his military ascent and made him the commander of the National Army with the rank of Field Marshal — the first of its kind in Libya – as a reward for his efforts to “purify the country from the filth of extremists and the Muslim Brotherhood,” as he once told me.

But now, 12 years after his rise and six years after his failure to capture the capital Tripoli, Haftar and his family’s ambitions for power and wealth have mixed together through a model of indirect control.

Militarization of the economy

Haftar’s influence is not limited to military affairs; it also relies on an economic network linked to the army and the family in ways designed to enhance both his political and military influence.

He also benefits from informal exports through companies linked to his son Saddam, which exported about 7.6 million barrels of oil, worth $600 million, outside official channels between May and December 2024. In 2025, average production reached 1.37–1.375 million barrels per day, the highest level in 12 years, with oil revenues amounting to about $22 billion — a 15% increase from the previous year.

Haftar uses his control to threaten the closure of oil fields in order to obtain a larger share of revenues or political concessions, as his economic power depends heavily on his control of the Sirte Basin.

Family ambition

Studies indicate that Haftar’s forces form a broad alliance of armed groups also linked to economic interests in eastern Libya.

Saddam became his father’s deputy after leading military units that play a central role in the power structure and exert influence over economic deals related to reconstruction.

A senior commander in Haftar’s forces said the elevation of Haftar’s sons represented an effort to consolidate power between senior and junior leadership in the army. Another officer who preferred not to be named said that the situation appears stable inside the army for now, but it could change quickly if Haftar’s influence diminishes in one way or another.

A UN Panel of Experts report accused Saddam, in partnership with Ibrahim Dbeibah (the son-in-law of Prime Minister Dbeibah), of managing an unprecedented system of “institutional corruption” in the energy sector by exploiting his influence to provide political and security cover that enabled criminal networks to escape punishment entirely.

Khaled Haftar holds the position of Chief of Staff of the army, which numbers about 90,000 fighters, with an unofficial budget estimated at 5

billion dinars ($800 million) for salaries and operations, not to mention the value of weapons and their secret deals, which far exceed that amount.

But the most important of Haftar’s sons is the undeclared one: the eldest, al-Siddiq, who most resembles his father in appearance and character. He has gone beyond the role of loyal assistant to become the keeper of his father’s secrets and his de facto foreign minister.

Al-Siddiq once told me in a private conversation in Cairo that he dreams of heading the government. But he bristles at allegations that his family will become like the Gaddafis. “We are a different family and necessarily our experience does not represent others,” he told me in 2024. He was the only one who accompanied Haftar when he entered the military hospital in Paris for treatment following a health crisis he suffered during a visit to Cairo years ago.

Washington and a new dictatorship

The path the Haftar family is taking today goes beyond traditional military ambition; it is an attempt to legitimize family influence through parallel institutions that guarantee financial and security sustainability.

With presidential elections indefinitely postponed, Haftar is no longer able to claim the throne of the country. But he has now necessarily become the maker of new kings who bear his name.

Will Washington repeat its classic mistake of supporting the “strongman” to preserve temporary stability, only to wake up later to a more complex and corrupt family dictatorship?

Talk of “unifying institutions” risks becoming the wholesale privatization of the army and oil in favor of a single family — with American blessing.

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Khaled Mahmoud Ramadan is an Egyptian journalist and Cairo University graduate. Specialized in Arab and political affairs, his reports are widely cited by global news agencies. His career includes roles at Al-Arab, the Libyan News Agency, and Radio Canada. Since 1999, he has written for Asharq Al-Awsat, while also contributing to Egypt’s Al-Dustour and Lebanon’s Al-Akhbar.

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Kersten Knipp

For the first time, representatives from both sides of Libya’s political divide are participating in Flintlock, a multinational military exercise under US leadership. Is this a tentative sign of hope for reunification?

Soldiers from around 30 nations are training to fight terrorism, practicing international cooperation and seeking to strengthen the region’s fragile stability in Flintlock, a joint military exercise under US leadership. The training takes place in Libya and Ivory Coast through the end of April.

For Libya, which has been split into east and west administrations following years of civil war, it is particularly significant that representatives from both parts of the country are participating in the exercise for the first time.

‘Visible rapprochement’

“All things considered, this is a truly remarkable political signal,” Hager Ali, a political scientist at the German think tank GIGA Institute in Hamburg, told DW. Flintlock is part of an established US-led military exercise format; however, the location and participants make a difference this time, she said.

“The fact that the exercise is taking place in Libya for the first time and that both rival camps are represented is certainly a special feature,” she added, noting that it is evidently part of the longer-term efforts to reunite the armed forces that have been fragmented since the fall of Gaddafi in 2011.

Michael Bauer, head of the Konrad Adenauer Foundation (KAS) office in Tunis, agrees. “The publicly staged handshake between the two rival camps represents a rare, visible sign of rapprochement,” he said. This demonstrates that cooperation is possible, at least at the operational level — albeit still under external mediation, particularly by the US, he told DW.

Dysfunctional state

This cautious rapprochement under American pressure involves a country that still barely functions as a state. “The country lacks a unified, functional government structure with a clear delineation between the executive, legislative and judicial branches,” the recently published Bertelsmann Transformation Index 2026 states.

In other words, political and economic power is divided between rival governments, armed groups and other regional actors, resulting in a fragmented political environment that hinders the establishment of effective democratic rule.

Libya has been divided since 2014 between two rival governments. In the west, the UN-recognized Government of National Unity in Tripoli. In the east, the Government of National Stability in Tobruk is backed by General Khalifa Haftar’s Libyan National Army.

Against this backdrop, any form of cooperation is remarkable — and the military exercise is not the only example. Recently, for the first time in many years, a joint national budget was adopted. North Africa expert Bauer views this as a “tangible sign of institutional rapprochement,” but warns against unrealistic expectations.

Hager Ali, too, considers this to be only one possible step in a longer process. “The joint budget could help rebalance economic power structures — particularly vis-à-vis influential actors such as General Khalifa Haftar, who rules the eastern part of the country and whose network is deeply embedded in Libya’s economic structures,” she said, adding that at least, it represents an attempt to centralize political and economic leverage more strongly.

Other factors at play

Both analysts emphasize that the motives behind theUS-led military exercise extend far beyond Libya. The focus is on counterterrorism across the entire Sahel region, the increasing spread of weapons there — for example as a result of the war in Sudan — and efforts to push back Russian influence. Hager Ali points in particular to Moscow’s presence in eastern Libya, noting that “the US in particular is clearly seeking to counter this more strongly.” 

Libya is increasingly become a stage for international strategic competition due to its geographical location in North Africa and oil resources.

“Libya’s oil production, stable for now under informal arrangements but structurally fragile, matters more than usual,” the Washington-based think tank Middle East Institute (MEI) recently stated. 

This could present an opportunity for Libya, however, domestic political dynamics remain unpredictable, and key questions regarding the distribution of power and resources continue to be disputed among rival centers of power. “Succession in Libya is unlikely to be resolved solely through formal legal mechanisms,” the MEI analysis says. Isolated signs of cooperation are unlikely to make much of a difference in addressing this structural problem.

Economic tensions

“Libya’s current fiscal path is unsustainable. Persistently large fiscal deficits are intensifying pressures on the exchange rate, international reserves and inflation,” the International Monetary Fund assessed in a recent study. High public spending, inflation, and currency pressures are placing pressure on the population and exacerbating social tensions. Reforms have long been considered urgently necessary but remain politically difficult to implement.

Despite the recent signs of cooperation, North Africa analyst Michael Bauer sees likttle chance in the near future of substantial progress between the conflicting parties and their leaders. “The division gives them access to resources and ensures their influence,” he told DW. “The tentative attempts at cooperation have so far been little more than collaboration deemed useful by both sides,” the Libya expert added.

For Libyans, this means that cooperation on military exercises and the national budget could indeed be a first step. However, as long as the key political actors continue to profit from Libya’s division and maintain their power structures, a strong and united Libya is likely to remain an illusion.

***

Kersten Knipp – Political editor with a focus on the Middle East

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Washington is seeking to strengthen its position in North Africa and weaken Moscow’s influence.

Libya may become a new point of confrontation between Russia and the United States. This week, for the first time, the republic hosts the Flintlock 2026 exercises under the auspices of the African Command of the US Armed Forces, in which more than 30 states participate. Formally, we are talking about combating terrorism and strengthening security. In fact, Washington is trying to gain a foothold in one of the key countries in North Africa. Whether the United States will be able to strengthen its influence and oust Russia in the region is in the Izvestia article.

Under the cover of exercises

Flintlock is an annual exercise that the United States has been conducting in Africa since 2005. They are usually devoted to the fight against terrorism, border protection and coordination between the armies of different countries. This year, more than 30 countries from Africa, Europe and the Middle East are participating in the maneuvers.

The peculiarity of the current “Flintlock” is that for the first time part of the exercises is taking place in Libya. Since 2014, the country has actually been divided into two parts. In the east, in Tobruk and Benghazi, the forces of the military commander Khalifa Haftar have gained a foothold. In the west, in Tripoli, there is a government recognized by the United Nations, which has been led by Abdel Hamid al-Dbeiba since 2021.

The venue chosen is the city of Sirte, which is considered the conditional border between the two Libyan centers of power. It was here that the Americans decided to bring together representatives of both camps.

“These exercises are not just military training. These are overcoming differences, building capacity, and supporting Libya’s sovereign right to determine its own future. By working side by side with Libyans from the west and east, we are directly contributing to Libya’s efforts to unify their military institutions,” said John Brennan, Deputy commander of the US Africa Command last year.

Thus, Washington is trying to present the exercises as an attempt to promote the unification of the country. However, according to The Wall Street Journal, the main goal of the United States is to weaken Russia’s position in the country. According to the newspaper, participation in the “Flintlock” will allow the Libyan forces to gain access to American equipment and training, which should reduce their dependence on the Russian Federation.

“Libya is gradually becoming a more orderly country. More traditional Western players are ready to interact with both the West and the east of Libya, so Russia finds itself on the sidelines,” Jeff Porter, president of North Africa Risk Consulting in New York, was quoted as saying by the newspaper.

The Russian Defense Ministry has not officially confirmed the presence of military personnel in Libya, but some media reported on the transfer of Russian military and equipment to the region. In particular, after the change of power in Syria, part of the Russian forces first withdrew to the Khmeimim airbase and the fleet base in Tartus, and then allegedly could be transferred to the east of Libya.

A tasty morsel

Libya remains one of the most attractive countries in Africa for external players. It has the largest proven oil reserves on the continent — about 48.4 billion barrels. Natural gas reserves are estimated at about 2 trillion cubic meters. It is the extraction and export of hydrocarbons that form the basis of the Libyan economy.

Russia also retains economic interests in the country. In October 2021, Tatneft announced the resumption of exploration in Libya, and the authorities in Tripoli said they were interested in a full-fledged return of the company. In the same year, Gazprom started producing oil again as part of a project in the Sirte basin. And Russian President Vladimir Putin met with Haftar in the Kremlin in 2025.

There is still great interest in this country. I cannot say that it has been fully realized: the potential of Russian-Libyan cooperation is very great, and it has a lot to develop. But this is complicated by the fact that after the events of 2011, Libya actually turned out to be fragmented,” Andrei Yashlavsky, a leading researcher at the Primakov Institute of the Russian Academy of Sciences, said in an interview with Izvestia.

However, the US attention to Libya is not only due to its natural resources. The country has access to the Mediterranean Sea, and one of the main routes of illegal migration from Africa to the European Union passes through its territory. Therefore, the geographical location of the republic is of great strategic importance.

After the change of power in Syria, Libya’s importance for Moscow has also grown. The Kremlin cooperates with some states in the region. The Russian Defense Ministry reported on the work of instructors in the Central African Republic, and Russian Foreign Minister Sergei Lavrov said in 2021 that the Malian authorities had turned to a “private military company from Russia” to fight terrorism. In this regard, Tripoli can become a link for Moscow with the Sahel countries.

Despite all the drama of what is happening, Libya remains a very tasty morsel both in geopolitical and geo-economic terms. In addition to hydrocarbons, Libya is rich in rare earth resources. Influence in the country means influence on North Africa, the Sahel region, and the Mediterranean,” the expert emphasized.

The true motives

Washington has been systematically trying to establish relations with the east of Libya in recent years, primarily through the 5+5 format. His task is to promote reconciliation and unification of the country. In practice, most 5+5 statements remain declarative. A real unification of Haftar’s army with the security forces of western Libya still looks unlikely, RIAC expert Anton Mardasov told Izvestia.

At the same time, Khalifa Haftar’s sons, primarily Belkacem, maintain close contacts with the United States both on military and political lines, as well as economically. Because of this, rumors periodically appear that different representatives of the Haftar family are oriented towards different external players, and that in the future this may lead to internal conflicts in eastern Libya.

However, this balancing is probably intentional and allows the East not to lock itself into traditional allies: Russia, Saudi Arabia, the United Arab Emirates and Egypt. And at the same time, to develop relations with Turkey, as well as with European and Asian countries,” the specialist explained.

At the same time, the possible Russian presence in eastern Libya remains an important part of the existing balance of power. According to the source, the network of Russian military facilities can serve Benghazi as an additional guarantee of stability. Therefore, the contacts of the Haftar family with the Americans are most likely related not to the desire to dramatically change the status quo, but to an attempt to obtain more economic benefits and other preferences from different partners.

At the same time, the United States is unlikely to have positive feelings about Libya and wants to see it strong and prosperous, Yashlavsky points out.

“For them, this is another “cage” on the big geopolitical board — an opportunity to gain a foothold in North Africa, the Mediterranean, in fact, in the “underbelly” of Southern Europe, and at the same time an attempt to oust Russia from there,” he believes.

At the same time, according to the expert, Russia’s role in Libya is often exaggerated in the Western media. Even after the events in Syria, the country has hardly become a priority for Moscow. However, the United States, according to him, is trying to take advantage of the situation.

But do not forget that at some point Muammar Gaddafi tried to establish relations with the West. Libya has defiantly abandoned programs related to weapons of mass destruction and has moved closer to the United States and Europe. However, this did not end with the normalization of relations, but with the events of 2011: first, the uprising within the framework of the “Arab Spring”, and then the direct military intervention of NATO countries. As a result, Gaddafi himself was killed, and Libya effectively ceased to exist as a single state. A decade and a half has passed, but the country still remains fragmented,” the expert concluded.

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Alexandra von Nahmen

For the first time, Libya is hosting the Flintlock military exercise and soldiers from both sides of the divided country are taking part. It’s due to security concerns, economic interests and competition with Russia.

An exercise to unify Libyan forces

After years of fighting, rival factions agreed to a ceasefire in 2020. But the oil-rich nation has remained divided between two administrations since 2014.

Now Libya’s west is controlled by the Government of National Unity (GNU), an internationally recognized UN-brokered provisional government based in Tripoli under Prime Minister Abdul-Hamid Dbeibah. The eastern administration is based in Tobruk and led by Osama Hammad, who is backed by the warlord-turned-politician Khalifah Haftar. 

General John Brennan arrives for the opening ceremony of Flintlock 2026 in SirteImage: Special Operations Command Africa

This week, Flintlock 2026, a US-led special operations exercise with 30 nations participating, kicked off in Sirte. The Flintlock event has been held around the continent since 2005, with European and African countries participating. But this year, for the very first time, Libyan forces from both sides of the country are taking part in the exercises and Libya is hosting parts of the exercise. 

Back on board the Dash 8, the VIP of the day is Lieutenant General John Brennan. The deputy commander of the US Africa Command is on his way to observe the training exercise. Speaking with the press, he repeatedly makes clear how remarkable it is that this exercise is bringing together Libyan forces from the eastern and western parts of the country.

“The Libyan people deserve unified security forces to protect them and their interests,” Brennan says. “Security breeds prosperity.”

Why does it matter for the US?

Having soldiers from the two sides train together, wearing the same uniform during Flintlock 2026, is considered a major achievement.

Libya is de-facto split between two competing power centers, but both their representatives were present at the opening ceremony of a joint military drillImage: Special Operations Command Africa

When asked about the purpose of US engagement in the region, Brennan says, “Libya is a critical key terrain for NATO’s southern neighborhood.” 

Western intelligence agencies are highly concerned about activities by terrorist groups like the “Islamic State” and al-Qaeda in the region. They seem to be expanding quickly in Africa, especially in the Sahel, kidnapping civilians and conducting major attacks against militaries and civilians alike. From the US perspective, stabilizing Libya is also about preventing such threats from potentially going global, one official explains.

Prioritizing economic security

However this exercise is also about economic opportunities. The goal is to factor in “where the security and economic interests of the US overlap,” according to a US defense official DW spoke with. This is in line with the US national security strategy, which defines economic security, including securing access to critical supply chains and materials, as one of its priorities. Indeed, the administration under US President Donald Trump is eager to gain access to resources in the region.

But so are other actors. 

Russia, for example, has interest in Libya’s oil and gold reserves. Its former Wagner Group mercenaries, now rebranded as the Africa Corps, have been active in the country since 2019, delivering military equipment and collaborating with forces alinged with Haftar. Meanwhile China’s strategy for Africa focuses on securing long-term access to critical minerals, for instance by acquiring major mining assets. Wagner’s presence in Africa and what it gets in return

A whole region at stake

After a five-hour flight, we’re finally in Sirte. A seemingly endless convoy of SUVs takes us to the designated training site. Every few hundred meters, we see soldiers, police and armored vehicles along the route.

The training scenario is simple: Terrorists have kidnapped migrants and are holding them hostage. Libyan and US special forces must free the hostages and eliminate the terrorist threat. The forces move quickly under the supervision of visiting generals and other dignitaries. Among them is Gianluca Alberini, Italy’s ambassador to Libya.

“For Italy, Europe and the US, a united Libya will be able to provide stability to the whole region,” he tells us. Asked about doubts as to whether the competing factions in Libya are really committed to a united country, he acknowledges that, “it is a process” and calls “a bigger engagement of the US in this region a big factor.”

Incentives for reunification

Two years ago, a military drill like this one, with a new joint operation center for all Libyan forces, was almost unimaginable. Now Libyan military chiefs from competing factions in the country’s east and west hold speeches in Sirte, describing the path to Libya’s reunification as “not a choice but a must.”

Brennan says the magnitude of potential economic investment “is an incentive for a reunification” for Libya’s rival administrations. Other officials gathered in Sirte seem to believe that too. Many point out that unifying the Libyan military could also minimize Russia’s influence. Africa’s critical minerals dilemma explained

Russia doubles its deployment

Following military coups in Mali, Burkina Faso and Niger, Western forces were largely expelled from the Sahel region as successive governments opened their doors to Russia instead. Neither the US nor Europeans want this scenario to repeat in other nearby countries.

Since 2024, Russia has doubled its military deployment in West Africa and is actively seeking to enhance its presence and influence in Libya as well. It reopened an embassy in Tripoli in 2024 and reportedly transferred personnel and military equipment to an abandoned base near the border with Chad and Sudan.

“The significant Russian military presence in Libya on the southern flank of NATO is obviously a concern for us,” British Ambassador Martin Reynolds says in Sirte. 

“We would like to see a government we can work closely with,” Reynolds adds, one “which does not see the need to bring in foreign powers in the way it is currently happening.”

***

Alexandra von Nahmen – Head of DW’s Russia, Ukraine and Eastern Europe department

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Christopher Harvin and James Durso

A defining pillar of President Trump’s America First agenda has been national energy security. Paired with the diplomatic momentum of the Abraham Accords, that strategy has reshaped regional alliances, strengthened U.S. partnerships and reinforced economic stability at home. 

Today, both pillars are under strain. The widening war with Iran has triggered one of the most severe energy shocks in decades. Oil prices have surged above $115 per barrel as markets react to escalating tensions and the risk of prolonged disruption. 

At the center of the crisis is the Strait of Hormuz, a chokepoint through which roughly one-fifth of global oil supply flows. With shipping constrained, the effects are cascading across the global economy, raising fuel costs, fueling inflation, and increasing the risk of economic slowdown in the U.S. and among its allies. 

Washington has responded with extraordinary measures. As of March, the U.S. had released approximately 172 million barrels from the Strategic Petroleum Reserve as part of a coordinated 400-million-barrel drawdown with members of the International Energy Agency. Although this has helped blunt immediate price spikes, it has depressed U.S. reserves to roughly 243 million barrels — the lowest level since the early 1980s.

At the same time, policymakers have cautiously adjusted sanctions policy to stabilize supply. While maintaining core restrictions on major Russian energy firms such as Lukoil and Rosneft, the U.S. has temporarily eased certain measures. A 30-day waiver for stranded Russian and Iranian oil cargoes and a more flexible approach to shipments involving Cuba reflect a pragmatic effort to ease market pressure amid the Hormuz disruption.

These steps underscore the urgency of the moment, but also their limits. Strategic reserves are finite, and sanctions flexibility carries geopolitical trade-offs. Together, they buy time, but they do not address the underlying constraint: insufficient global supply and supply chain instability.

While Trump looks for options to stabilize markets in a durable way, a more strategic opportunity is right in front of him: Libya. 

Libya holds more than 48 billion barrels of proven oil reserves, the largest in Africa. It also produces precisely the kind of light, sweet crude most sought after by European refiners.

Before years of instability caused by the NATO attack on the Gadhafi regime, Libya generated roughly 1.6 million barrels per day. With political stability and renewed investment, production could exceed 2 million barrels per day, providing a meaningful buffer against Gulf disruptions.

In today’s market, that incremental supply matters. Energy markets are driven as much by expectations as by actual output. The credible prospect of increased Libyan production could restore confidence, reduce volatility, and place downward pressure on global energy prices. 

The challenge is governance,

not geology. 

Since the fall of Moammar Gadhafi in 2011, following NATO’s intervention led by the Obama administration, Libya has remained fragmented. Rival governments and militia control over infrastructure have repeatedly disrupted production and deterred investment. That failure now presents a unique and important opportunity for Trump.  

A durable political settlement in Libya would unlock suppressed production, attract investment and provide Europe with a reliable, proximate alternative to Middle Eastern supply routes. At a moment when the Strait of Hormuz remains a chokepoint, Libya offers a Mediterranean corridor largely insulated from Gulf volatility. 

The benefits extend beyond energy. Libya’s instability has created space for extremist organizations to operate, including ISIS and al-Qaeda. Stabilization would strengthen counterterrorism coordination with the U.S. and Europe and enhance regional security. It would also counter growing influence from China and Russia, both of which are expanding their presence across Africa’s energy sector. Libya, given its reserves and location, is a strategic prize. 

For Trump, Libya offers a rare convergence of opportunity and feasibility. Unlike Iran, it is not an entrenched adversary. Unlike Venezuela, it is not defined by ideological opposition to U.S. engagement. Instead, it is a fragmented state whose competing factions share a common incentive: restoring oil production and revenue. 

That shared interest creates the foundation for a pragmatic diplomatic breakthrough. Emergency reserve releases and temporary sanctions relief are stopgap measures. A successful diplomatic initiative in Libya would expand global supply, reduce long-term price volatility, and deliver a clear geopolitical win. 

At a moment of historic disruption driven by the Iran conflict, Libya is not simply another foreign policy challenge. It is a strategic solution hiding in plain sight. 

***

Christopher Harvin is managing partner of GlobalPoint International, a Washington-based strategic communications and government affairs firm. He is a former adviser to the secretary of Defense and has more than 25 years of experience in the Middle East and Africa. 

James Durso is a regular commentator on foreign policy and national security matters. He served in the U.S. Navy for 20 years and has worked in Kuwait, Saudi Arabia, Iraq and Central Asia.

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The Sentry

Gadalla’s Ubiquity

Ventures controlled by Gadalla span an extensive range of sectors, including oil refining, food, steel, telecommunications, aviation, maritime shipping, consulting, and cement, the last of which is through the scandal surrounding Jan Marsalek, a Moscow-linked Austrian fugitive wanted in Germany in connection with the $2.1 billion accounting fraud that drove Wirecard’s 2020 collapse.

In 2024, Gadalla established an information technology company in the UK and bought a Malta-based seaport services company. Yet none of these official undertakings seem able to explain the extent of his wealth. His wife frequents Milan’s luxury boutiques, while he flaunts a $500,000 Richard Mille watch.

He carries a St. Kitts passport and flies on private jets. He stays at premium hotels like the Bvlgari Hotel London in Knightsbridge, where he spent Boxing Day 2024. Gadalla owns eight real estate properties in the UAE worth a total of about $1.7 million, not to mention a $3.7 million condominium in one of Toronto’s poshest neighborhoods.

Gadalla, who maintains permanent residency in Canada, is even a donor to Toronto’s prestigious Sinai Health Foundation. Through his numerous activities, Gadalla has both enjoyed the protection of the Haftar family and played an essential role in expanding their influence in eastern Libya.

He has consolidated a startling array of roles, enabled by his sponsors’ grip on territory and infrastructure—leverage used to intimidate bankers and shuttle goods and cash across borders.

Fundamentally, Gadalla’s success rests on privilege underwritten by the coercive reach of Haftar’s armed network. particularly coveted given the reconstruction drive underway in eastern Libya since 2023. Gadalla’s operations extend across multiple jurisdictions, including Libya, the UAE, Malta, and the UK.

Toward Conflict: A Plan, a Bank, and

a Financier

By October 2018, the Emirati government and the Haftar family had agreed to launch a full‑scale land and air campaign against Tripoli. Russia’s Wagner Group, which was already deployed to Libya for Haftar’s assault on the eastern Libyan city of Derna in May 2018, was willing to fulfill a combat function but demanded steady cash. Financing the Tripoli operation, of which the Wagner Group was only a partial component, necessitated dependable offshore channels to move dollars.

The UAE and, to a lesser extent, Saudi Arabia are suspected to have supplied the bulk of the funding required for Haftar’s offensive on the Libyan capital. An economic advisor to the Haftar family, Farhat Benqdara, had recently become chairman of al-Masraf, the commercial bank headquartered in Abu Dhabi. Jointly owned by the UAE, Libya, and Algeria, the bank offered precisely what the Haftars needed: the means to move dollars discretely, away from Libyan regulators. To reinforce this external funding of the military operation, Haftar’s network called on Gadalla, thus giving a prominent role to a younger financier who had operated in Dubai since 2008.

Gadalla had run afoul of Emirati state security sometime between 2016 and 2018 owing to suspected money transactions involving high risk entities. However, ahead of the attack on Tripoli, intervention by Field Marshal Haftar convinced Abu Dhabi to rehabilitate Gadalla. Allowed to resume business through his three Dubai-based companies, he became a key operative for war financing.106 By early 2019, Gadalla stood ready to act.

Haftar’s forces receive $300 million via the UAE With Benqdara as chairman, al-Masraf extended $300 million in loans to three obscure companies controlled by Gadalla in 2019: JTA General Trading LLC, al-Mored Oasis General Trading LLC, and AMAA General Trading LLC. According to a senior LFB official and several other sources, the money, which left Gadalla’s companies almost immediately, funded Haftar’s LAAF operations and most likely bankrolled Wagner mercenaries’ deployment in the context of the April 2019 Tripoli offensive.

Officially, al-Masraf serves corporations, government bodies, and small and medium-sized enterprises. Its traditional lending is anchored in trade finance, including letters of credit and guarantees, short-term working-capital facilities, and term loans. Gadalla’s three Dubai-based entities present themselves as general trading firms engaged in import-export and wholesale distribution across everyday commodities and supplies, including foodstuffs and construction-related materials, as well as office or industrial goods.

It is under this official framework that al-Masraf extended $300 million to Gadalla’s three companies. Yet before extending the loans, al-Masraf secured a precaution difficult to reconcile with routine commercial lending to creditworthy borrowers: a guarantee deposit from the LFB equal to the full loan amount.

Through this arrangement, the LFB absorbed 100% of the risk. If the three borrowers failed to repay and al-Masraf declared the loans a permanent loss, the Abu Dhabi bank could execute the guarantee and seize the LFB’s $300 million deposit outright. Put differently, public funds from Tripoli underwrote the loans to companies that channeled cash into Haftar’s war on Tripoli.

According to a senior LFB official, al-Masraf’s demand for a guarantee deposit from the LFB suggests the Abu Dhabi-based bank understood the hazards of lending a large sum to Gadalla’s entities, given their meager assets, business records, and revenue streams. JTA General Trading LLC, alMored Oasis General Trading LLC, and AMAA General Trading LLC did not respond to The Sentry’s requests for comment.

The UAE has frequently served as a hub in Wagner-linked revenue chains; moreover, a US government assessment found that the UAE may have specifically funded the Wagner Group’s 2019–2020 operations in Libya. Gadalla’s three Dubai-based entities later appeared on a blacklist issued by the CBL owing to suspected letter-of-credit fraud, with an investigation by the Libyan attorney general pending.

These elements—combined with the Wagner Group’s extensive combat role in the 2019–2020 assault on Tripoli and the Russian mercenary firm’s well-documented practice of routing payments through channels designed to obscure their origin—reinforce the allegation of The Sentry’s sources that at least part of the $300 million in loaned funds went to Wagner.

Gadalla did not respond to The Sentry’s request for comment. When launching his offensive on the Libyan capital, Field Marshal Haftar vowed to achieve a lightning victory. Such a military win would have handed the Haftar family the CBL, the LFB, and the NOC, along with the contracting power of government ministries—enough leverage to funnel public money back to the three Dubai-based companies through sweetheart deals and erase all traces of the fraud.

Instead, the offensive lingered for 14 months and ended in ruin after Turkey intervened. A tacit Russian– Turkish agreement ordered Wagner Group combatants to pull back in late May 2020, which compelled Haftar’s fighters to abruptly abandon the outskirts of the capital in disarray a few days later.

During the long stalemate that followed the civil war’s end on June 6, 2020, the Wagner Group continued to demand payment, even as Haftar’s finances dried up. In 2020, Gadalla’s companies did not repay the $300 million they received in 2019. When al-Masraf closed its 2020 accounting, it posted a net annual loss of $240 million, resulting from “impairment charges” of about $375 million, which Chairman Benqdara blamed on the COVID-19 pandemic.

The hit was likely the only annual net loss al-Masraf had posted in its recent history.139 Ernst & Young, al-Masraf’s auditor for Fiscal Year 2020, issued a standard audit opinion, stating that al-Masraf’s 2020 financial statements were free from material misstatements. But Benqdara’s COVID-19 explanation masked the truth: out of the $375 million loss, a significant portion seems to have had little to do with the coronavirus. The $300 million principal paid out in 2019 was funneled into a failed war of aggression, and for the most part, remains unpaid.

Ernst & Young did not respond to The Sentry’s request for comment. After the LAAF’s mid-2020 defeat in northwestern Libya, Russian personnel became permanently entrenched in air bases across central and southern Libya, still drawing recurring payments from the Haftar family for a static, non-combat function—costly, but less so than the offensive that preceded it.

Gadalla continued to operate businesses in Dubai and other locales. Benqdara retained his role as chairman of al-Masraf even after he returned to Libya in 2022 to head the NOC, a move that further politicized the institution, increased the opacity of its operations, and brought it more firmly under the Haftar family’s sway.

In April 2021, the LFB, as a major shareholder of al-Masraf, sent a letter to Benqdara demanding clarification about the exceptional losses recorded the previous year. The LFB faced the risk that al-Masraf could move to enforce its claim on the guarantee deposits posted in 2019 as collateral to protect al-Masraf against default by the three UAE-based companies. But al-Masraf did not crystallize the loss; it continued marking the loans as non-performing rather than unrecoverable.

Also in 2021, the borrowers made a $70 million partial principal repayment, reducing al-Masraf’s outstanding loan balance from $300 million to $230 million. This $230 million balance remained outstanding as of January 2025. In late 2025, a source told The Sentry the borrowers may have made another small repayment, but those claims could not be independently verified. In 2024, the LFB presented documentation to the Libyan Attorney General’s Office, seeking a formal inquiry, which was launched that year.

A senior LFB official told The Sentry that the 2019 al-Masraf loans of constitute one of the most sensitive and controversial cases in Libyan banking, alluding to the powerful leaders they implicate. At the time of publication, nobody, including Gadalla, has been held accountable, and the Libyan Attorney General’s inquiry, which seems to focus on former LFB general manager Jamal, remains ongoing. None of the parties involved in the $300 million transaction, including Gadalla and his three Dubai-based companies, al-Masraf, or the LFB, responded to The Sentry’s requests for comment.

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The Sentry

How Western Libya Paved the Way for an Eastern Libyan Scheme

In the months leading up to the 2019 offensive against Tripoli, Sadiq al-Kabir, governor of the CBL from 2011–2024, took strategic steps to contain his adversaries in western Libya while accommodating those in eastern Libya. Indeed, Kabir seemed to hedge against a potential Haftar victory.

In 2018, he overhauled the leadership at the LFB—the CBL’s wholly owned subsidiary through which most of Libya’s daily dollar operations flow, from letters of credit to direct transfers.

In doing so, he consolidated his control over state funds while working against the UN-recognized government in Tripoli, which sought to undermine him. Kabir also promoted Farhat Benqdara, a banker closely aligned with the Haftar family in Benghazi, to chairman of al-Masraf. These maneuvers would prove instrumental in enabling the $300 million scheme on the eve of Haftar’s attack.

For Kabir, 2018 was a year of vulnerability, marked by the dinar’s weakness, criticisms from the Haftar family, and attempts from the eastern-based House of Representatives to replace him.

Among other self-preservation maneuvers, Kabir dismissed the entire LFB leadership in August 2018, ostensibly to prevent financial losses. Whatever Kabir’s motives, this restructuring resulted in a consolidation of his personal control over Libya’s oil revenues and eliminated influence from the then-GNA, a political adversary.

Indeed, GNA leader Fayez al-Sarraj and several of his ministers resented Kabir’s habit of treating state liquidity as a political lever, disbursing funds to the Tripoli government selectively and on his own terms.

In October 2018, Tripoli militias aligned with Kabir forcibly removed Mohammed Bin Yusuf, the incumbent managing director of the LFB, from office, instead installing loyalist Mohammed Najib al-Jamal at that strategic post.

Soon afterward, it was Jamal, then known for his subservience to Kabir, who transferred $300 million from the LFB to al-Masraf as a guarantee deposit backing the conflict-financing scheme.

Given the strict hierarchy between the two men, it is implausible that Jamal could have granted such a critical financial transaction to al-Masraf without Kabir’s assent. The CBL did not respond to The Sentry’s request for comment.

In parallel with the 2018 changes at the LFB, Kabir pursued a rapprochement with Farhat Benqdara, a fellow Libyan banker known for his proximity to the very Eastern factions seeking to undermine Kabir. Benqdara, a Benghazi native, was the final CBL governor under the Qadhafi regime, a role he held until the 2011 uprisings.

After fleeing to Turkey in February 2011 and relocating to the UAE where he acquired Emirati citizenship, Benqdara became aligned with the Haftar family. In 2018, he became a key economic advisor to the field marshal and his sons.

Despite these ties to Kabir’s adversaries, the Tripoli based governor cleared the path for Benqdara to become chairman of al-Masraf in 2018.

The Libyan state’s equity state in al-Masraf is held through the LFB, which gave Kabir enough votes to help secure the chairmanship for Benqdara. Kabir’s move appears driven by self-interest.

First, by promoting a Haftar ally to a senior banking post in Dubai, Kabir bought time and reduced immediate threats from eastern groups who were seeking to remove him as CBL governor.

Second, the two bankers shared a history. In the late 1990s, when Kabir faced legal troubles, then-CBL governor Benqdara helped rehabilitate him professionally.59, 60 In some respects, the appointment appeared to serve as repayment for that earlier assistance.

Third, facing pressure from eastern Libya, Kabir likely sought to hedge his bets by facilitating the rise of a Benghazi figure who could bridge the gap between Kabir and his main adversaries, should those actors succeed in capturing the Libyan capital.

This history serves as a reminder that Libya’s east-west divide is seldom absolute. In illicit finance, political adversaries often cooperate for mutual profit.

By the same token, Prime Minister Abdelhamid al-Dabaiba’s government in Tripoli has yet to denounce Gadalla, thus maintaining connections between the country’s main rival networks.

Why Gadalla Matters Today

Between militia power and finance

Despite the LAAF’s collapse on the outskirts of Tripoli in 2020, the Haftar family has since consolidated power in eastern Libya, capturing most social and economic life.

Within this environment, Gadalla has become a pivotal figure in the illicit networks the Haftar family runs in eastern Libya and beyond.

Gadalla is a meaningful case study not because he is an outlier but rather because his trajectory exposes the systemic vulnerabilities in present-day Libya. With increasing sophistication, Libyan leaders leverage their physical might and territorial dominance to facilitate bold transnational endeavors.

These include money laundering schemes, various forms of trafficking, and routine imports of advanced weapons in contravention of international law. Other activities include the opaque funding of infrastructure projects in various sectors, such as telecommunication, construction, and aviation.

Present-day Libya’s warlords hold leverage over banking, hydrocarbons, telecom, electricity, customs, and other critical arenas. They subject almost every sector of the economy to intimidation, undue influence, and the co-option of mid-level officials.

Such contamination affects even ostensibly legitimate institutions, turning substantial portions of the economy into active nodes in predatory networks.

The country’s ruling elites rely on shadowy operatives who help them manage ill-gotten funds, stealing ever-larger volumes of public wealth, laundering it, and reinvesting portions of said profits into strengthening their military capabilities in contravention of international law. This creates a self-reinforcing cycle that benefits the handful of warlords who also function as political leaders.

This investigation, which focuses on Gadalla’s growing role in eastern Libya, documents a broader phenomenon that is not confined to his person or the Benghazi area. Even if Gadalla were held accountable, similar patterns would likely persist due to structural deficiencies in the Libyan system, which require continued vigilance and action to ameliorate.

Although he now presents himself as a legitimate businessman, Gadalla’s portfolio of official activities conceals a broad range of questionable financial operations executed on behalf of the Haftars. Gadalla’s ascent, which has unfolded at the very nexus between Libya’s militia rule and hollowed‑out economic institutions, shows how kleptocratic networks loot Libya’s public wealth on an immense scale.

Gadalla’s frenetic business history spans countless countries and domains of activity, often with dizzying ubiquity. The 46-year-old Benghazi-area native makes no attempt to maintain a low profile.

Before the anti-Qadhafi uprisings, Gadalla studied engineering and earned a master’s degree in the US at Indiana University Southeast. In 2008, he became a resident of Dubai. During the 2011 civil war, he sold automotive and household cleaning products in Libya for a US company.

As eastern Libya began to open up following Qadhafi’s fall, Gadalla utilized his Emirati footprint to expand his cross-border profile, starting with a 2012 trip to the Chinese manufacturing hub of Guangzhou, likely for sourcing.

Today, quite publicly, Gadalla boasts about leading the Alushibe Group, a loose set of private companies he controls in Dubai.76 At the same time, he leads several Benghazi-based companies while also being active in the public sector, serving as chairman of a Libyan state-owned steel company.

Separately, in 2023, Gadalla purchased Benghazi’s Libyan Cement Company, which had become notorious.

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Hafed Al Ghwell

How Libya’s fragmented governance enables oil revenue diversion through hybrid networks and what recent interventions signal for restoring state control.

Libya’s oil wealth is not just mismanaged but is being systematically diverted through networks that blur the line between state authority and illicit activity. The so-called “Arkenu affair” reveals how these hybrid structures operate within official systems, quietly draining billions while preserving a façade of legality.

At stake is more than lost revenue: This dynamic entrenches political fragmentation and weakens any path toward stable governance. Yet recent moves by Mohamed al-Menfi suggest a potential shift toward accountability, raising the question of whether Libya can begin to reclaim control over its most critical resource.

What began as a technical anomaly has metastasized into something far more revealing: a case study in how parallel power structures can capture a state’s most vital asset while maintaining a veneer of legality.

The “Arkenu affair” is a window into how Libya’s oil economy has been re-engineered, piece by piece, into a hybrid system where official institutions coexist with, and often serve, illicit networks.

At its core, Arkenu was not an outlier. It was an evolution.

Founded in 2021, the company emerged at a moment when Libya’s post-war political settlement prioritized stability over accountability. That trade-off created the perfect environment for hybrid entities — commercial on paper, political in function — to embed themselves within the oil value chain. 

Arkenu’s significance was in how it did not operate outside the system, but through it, leveraging contracts, access, and institutional blind spots to channel oil revenues away from the state.

The mechanics were neither novel nor crude.

Libya’s oil and fuel economy has long been vulnerable to arbitrage. Subsidized fuel priced at a few cents per liter domestically can fetch over a dollar once smuggled across borders.

That price differential, sometimes exceeding 40 times the official rate, has sustained a sprawling illicit economy for decades. What changed after 2021 was scale and coordination.

By 2024, Libya was importing roughly 37 million liters of fuel per day while domestic consumption needs hovered closer to 24 million. The missing fuel did not just vanish into thin air. It was diverted.

At prevailing market values, this translates into approximately $6.7 billion annually in lost fuel alone. Overlay this with crude oil diversions, opaque swap arrangements, and underreported exports, and the cumulative leakage becomes staggering.

Arkenu fit seamlessly into this architecture.

It reportedly handled millions of barrels within months of operation, generating hundreds of millions in export value. Yet a significant portion of these revenues bypassed the Central Bank.

Between late 2024 and early 2026, estimates suggest that over $3 billion may have been diverted through channels linked to its operations. This was not theft in the conventional sense. It was extraction — systematic, institutionalized, and shielded by layers of formal legitimacy.

The enabling conditions for this level of control were territorial, bureaucratic, and financial. In eastern and southern Libya, networks aligned with the Haftar family consolidated authority over ports, transport corridors, and key nodes of part of Libya’s oil distribution. This allowed them to operate a dual system. Officially, they oversaw fuel distribution and security. Unofficially, they taxed, redirected, and re-exported fuel flows at scale.

Maritime routes saw entire tanker shipments re-exported, sometimes via ship-to-ship transfers in international waters, obscuring origin and ownership. A single vessel could carry tens of millions of liters, making maritime smuggling the backbone of large-scale diversion.

On land, the system was more granular but equally effective. Checkpoints imposed informal taxes, distribution quotas were manipulated, and artificial shortages were engineered to push fuel into black markets.

This is where Arkenu’s role becomes clearer, not just as a participant in this system, but also a facilitator of its financial layer. By operating as a private entity with privileged access, it created a bridge between state-controlled production and private offshore revenue channels. In doing so, it helped transform a fragmented smuggling ecosystem into something closer to an integrated shadow economy.

The question then is not why this persisted, but why it took so long to confront.

That answer lies in Libya’s political equilibrium. Since 2021, governance has rested on a tacit bargain: distribute rents widely enough to prevent renewed conflict. Thus, it meant tolerating, and at times enabling, illicit revenue streams that sustained armed groups and political coalitions.

Efforts to disrupt these flows risked upsetting a very fragile balance.

Prime Minister Abdul Hamid Dbeibeh operated within these constraints. His administration oscillated between rhetorical commitments to reform and selective enforcement actions that stopped short of dismantling entrenched networks. In some cases, enforcement was reversed altogether, reinforcing perceptions of complicity or, at best, political caution.

Against this backdrop, the intervention by Mohamed al-Menfi, the Chairman of Libya’s Presidential Council, increasingly stands out, not as a reaction to crisis, but as part of efforts to reassert institutional coherence in a fragmented political landscape. In a system long defined by competing centers of power and transactional governance, his approach seeks to reposition the presidency as a guarantor of accountability and national balance.

By early 2026, the Arkenu issue had crossed a critical threshold. Public scrutiny intensified, fiscal losses became harder to obscure, and international attention raised the stakes.

Yet what distinguishes al-Menfi’s role is not simply that he acted, but how he framed the intervention. Rather than allowing the issue to remain confined to technical or bureaucratic channels, he elevated it into a question of sovereignty, public trust, and the integrity of Libya’s economic governance.

It is a remarkable shift as al-Menfi increasingly positions himself as a convening figure willing to engage across Libya’s political divides while also signaling that certain lines, particularly around the management of national wealth, cannot be crossed.

In doing so, he has begun to carve out space for a more assertive presidency, one that does not compete with other institutions so much as it seeks to anchor them.

His earlier decision to initiate a comprehensive audit of contracts across the oil and electricity sectors dovetails rather well with his handling of the Arkenu affair.

Rather than a narrow administrative measure, these were early strategic steps in building the institutional tools required to confront entrenched practices. In a context where opacity has often been the norm, such deliberate moves toward transparency carry outsized political weight.

The pressure exerted on the executive authority, including Prime Minister Abdul Hamid Dbeibeh, must also be understood within this framework. What might once have endured as a managed controversy was instead pushed toward resolution. It sparks a much-needed recalibration driven by the growing expectation that major economic files cannot be indefinitely deferred or politically contained.

Beyond the suspension of Arkenu’s operations, al-Menfi’s maneuvering also fired off new political signaling. Simply put, such high-level interventions — when anchored in institutional legitimacy and public accountability — can alter the trajectory of even deeply embedded systems.

Importantly, al-Menfi’s approach has avoided the pitfalls of overt confrontation in an already polarized environment. Rather than framing the issue in factional terms, he has emphasized principles: transparency, legality, and the protection of Libya’s shared resources.

This has allowed him to engage the issue without further entrenching divisions, an approach that aligns with his parallel efforts on national reconciliation.

In this sense, whether through quiet diplomacy between rival factions or through institutional initiatives aimed at restoring oversight, al-Menfi appears to be advancing a model of leadership that prioritizes gradual consolidation over abrupt disruption.

It is not a dramatic break from Libya’s past, but it does represent a departure from the inertia that has often characterized Libya’s notoriously flawed governance.

There are limits, of course. The structures that enabled Arkenu remain resilient, and attempts at circumvention, such as the emergence of new entities seeking to replicate its role, tease the swift adaptability of entrenched networks. Yet even here, the significance of al-Menfi’s intervention lies in raising the political cost of such maneuvers. What once operated in relative obscurity is now subject to heightened scrutiny at the highest levels of the state.

This matters for a country navigating overlapping transitions — political, economic, and institutional. Leadership in Libya has often been defined by short-term balancing acts. What is beginning to emerge is an effort to pair that balancing with boundary-setting: to maintain stability while gradually reclaiming the authority of the state.

The Arkenu affair, then, is not only a test of governance. It is also an early indicator of whether Libya’s leadership can move beyond reactive crisis management toward a more deliberate, reform-oriented posture.

In this regard, al-Menfi’s actions, measured, but increasingly assertive, offer a signal that such a shift, while far from guaranteed, is at least underway.

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The Sentry

Executive Summary

This investigation exposes the financial machinery that underwrote a significant part of Field Marshal Khalifa Haftar’s failed 2019–2020 offensive on Tripoli and documents the subsequent rise of a key enabler of the Haftar family’s kleptocratic activities: Ahmed Gadalla, also known as Ahmed Alushibe or Ahmed al-Aashibi.

Prior to the April 2019 assault, Gadalla utilized a set of companies based in the United Arab Emirates (UAE) to secure $300 million in loans from the Abu Dhabi-based Arab Bank for Foreign Investment and Trade, commonly known as al-Masraf bank.

These funds, backed by a guarantee deposit from the Libyan Foreign Bank (LFB), were funneled by Gadalla’s companies into the war effort, likely including payments to Russia’s Wagner Group. After Haftar’s offensive collapsed, the loans have remained largely unpaid, leaving the Libyan public to bear the financial burden while Gadalla has faced no accountability.

In the years since, Gadalla has transitioned from an obscure financier to a dominant force in eastern Libya’s economy, operating under the protection of Saddam Haftar, the field marshal’s son.

Gadalla has wielded control over the Bank of Commerce and Development (BCD) and other financial institutions in eastern Libya, such as Wahda Bank and National Commercial Bank, using them to facilitate large-scale letter-of-credit fraud and to launder illicit profits.

Through his control of BCD, Gadalla is also involved in the circulation of counterfeit Russian-printed dinars, a scheme that has helped undermine Libya’s local currency. Beyond financial abuses, Gadalla has served as a key enabler for the Haftar family’s transnational arms smuggling in apparent violation of the United Nations (UN) arms embargo on Libya.

Gadalla helped orchestrate several recent high-profile schemes, playing an active role in arranging the intricate payment structures and logistical routes necessary to illicitly transfer military equipment to Benghazi.

Incidents include the Haftars’ attempted importation of Chinese combat drones disguised as wind turbines in 2024 and their failed procurement of Spanish drones the prior year, not to mention the July 2025 shipment of armored vehicles and ammunition from the UAE intended for the Rapid Support Forces (RSF) militia in Sudan.

The Sentry sought comment from Gadalla and his companies, as well as from al-Masraf bank and the LFB on the allegations set forth in this report before publication. None of these parties responded to The Sentry’s requests for comment.

The scrutiny applied to Gadalla in this investigation serves a broader purpose: his prolific, multi-domain operations provide evidence of the profound structural deficiencies plaguing Libyan economic institutions. Rather than an isolated anomaly, Gadalla exemplifies the country’s systemic vulnerability and the unchecked rise of “enablers” who take advantage of institutional weakness and armed protection to help powerful figures loot state wealth.

By bridging the gap between militia violence and finance, figures like Gadalla assist warlords in translating territorial control into formidable economic sway. The impunity of such second-tier operators is sustained by the fragmentation of Libyan state institutions and the diplomatic hesitation of foreign governments, which remain reluctant to anger warlords perceived as essential to energy flows and migration control.

To dismantle this cycle, The Sentry recommends that the United States, Canada, the United Kingdom, and the European Union (EU) impose targeted network sanctions on Ahmed Gadalla, his companies, and his associates. Without concerted international action to hold enablers like Gadalla accountable, Libya faces the continued erosion of its economic foundations and the entrenchment of large-scale kleptocracy.

How Libyan Money Funded Haftar’s

Failed Offensive on Tripoli

On April 4, 2019, the Libyan Arab Armed Forces (LAAF) launched an offensive on the country’s capital, Tripoli. Field Marshal Haftar, based in eastern Libya, led the operation with Abu Dhabi as the primary foreign backer.

The offensive required a roughly $700 million effort mobilized upfront. While the operation’s stated aim was to cleanse the western province of “terrorist groups [that] spread corruption,” Tripoli was then the seat of the UN-recognized Government of National Accord (GNA).

The Haftar family’s plan was to penetrate the city center, topple GNA Prime Minister Fayez al-Sarraj, and place all major state institutions—including the Central Bank of Libya (CBL) and the National Oil Corporation (NOC)—under their authority.

The offensive quickly stalled as thousands of Haftar-aligned fighters reached the city’s outskirts, followed by a prolonged and lethal stalemate. As the war dragged on, the involvement of foreign mercenaries, advanced weaponry, and large-scale logistics made clear that vast sums had been funneled into the campaign—underscoring the financial engineering behind Haftar’s April 2019 push, which drew military support not only from the UAE but also from Russia, France, and Egypt, as well as diplomatic acquiescence from the United States.

Despite the participation of Russian combatants from the Wagner Group and Abu Dhabi’s direct involvement, which included more than 1,000 Emirati airstrikes across greater Tripoli in the following months, Haftar’s forces failed to capture the capital. Though ultimately ineffective, the war effort proved exceedingly costly.

Just before the attack began, the Haftar coalition, with the help of key enablers, secured $300 million in loans.

The Arab Bank for Investment and Foreign Trade, a minor Abu Dhabi-based bank often referred to as al-Masraf, disbursed loans backed by a guarantee deposit from the LFB, a strategic CBL subsidiary.

The Emirates Investment Authority and the LFB each held 42.28% of al-Masraf at the time, allowing the two to supersede the bank’s other shareholder—Banque Extérieure d’Algérie. The funds helped sustain the armed offensive, and part of the money likely went toward remunerating Russia’s Wagner Group, which engaged on the front lines of the assault between September 2019 and May. Ultimately, Haftar withdrew from the greater Tripoli area following the collapse of his forces on June 4, 2020.

The campaign left broad swathes of the Libyan capital’s southern outskirts in ruins and displaced approximately 149,000 residents. The bulk of the $300 million had not been repaid as of the date of this report’s publication, saddling the LFB—and thus the Libyan public—with the financial burden. Details of how the $300 million in loans came to finance the Haftar campaign were never publicly disclosed.

Through interviews, research, and analysis of numerous financial and other documents, The Sentry has found that Libyan businessman and financier Ahmed “Alushibe” Gadalla’s Dubai-based entities helped secure the loans and divert the money to fund the conflict.

Since the Haftar family’s military debacle on the edges of Tripoli six years ago, neither Gadalla nor anyone else has been held accountable for redirecting ostensibly civilian transactions toward the procurement of military equipment and foreign mercenaries, potentially violating the UN arms embargo on Libya.

Since 2019, Gadalla has only risen in prominence within Haftar’s inner circle. He continues to operate with impunity, facilitating arms smuggling, money laundering, and a host of other illicit activities that exploit state institutions to further the country’s kleptocratic boom.

Gadalla was featured several times in a UN Panel of Experts on Libya report posted on the internet on March 29, 2026. In that document, Gadalla—referred to as Ahmed Alushibe—is identified as the person who controls a network of shipping companies, several banks in eastern Libya, and shell companies, including in Dubai, that were used to circumvent the UN arms embargo, fraudulently obtain letters of credit from the Central Bank of Libya, and illicitly export refined petroleum products from the country. Before publication of this report, The Sentry sent requests for comment to Mr. Gadalla. He did not respond.

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Jonathan M. Winer

Parallel Tracks

Diplomatic efforts to reduce Libya’s fragmentation through negotiated arrangements among its political and security actors are ongoing.

The United Nations continues to press for its long-stalled political roadmap toward elections, while the approach associated with US Special Envoy Massad Boulos has focused on executive unification through the distribution of ministerial portfolios between western and eastern authorities as a stabilizing mechanism.

These efforts reflect a pragmatic recognition that Libya’s principal centers of power must be accommodated in any durable arrangement, and they may offer a pathway to near-term de-escalation.

But their viability in practice depends on how they connect to Libya’s formal institutional framework. The LPA does not authorize a bilateral executive bargain as a substitute for the consultative process involving the House of Representatives and the High Council of State.

To the extent that arrangements are perceived as bypassing those bodies, they risk lacking the legal and political grounding necessary for durability. In particular, absent recourse to mechanisms such as Article 64 of the agreement, which allows for broader political dialogue in certain circumstances, a narrowly constructed executive understanding may not resolve underlying questions of legitimacy.

The challenge, therefore, is not whether such arrangements can contribute to stabilization, but whether they can be integrated into a process that is recognizable under Libyan law and acceptable to the formal institutions, notably the House of Representatives and the High Council of State, whose role cannot be supplanted by executive-level agreements without rendering the outcome legally and politically unsustainable.

The Risk of Unilateralism

The most immediate institutional risk would arise if the House of Representatives under Speaker Saleh were to act unilaterally to designate a new prime minister, as he has previously sought to do. That Tobruk-based body retains both a legal argument to do this under the LPA and a political constituency for doing so again. Such a move would likely be rejected in Tripoli and by key western Libyan actors, as Saleh’s previous efforts were.

The result would not be resolution, but the re-emergence of parallel executive authorities, each claiming legitimacy. Under those conditions, control over ministries, financial institutions, and energy infrastructure would become contested. Oil production and export, which depend on coordination across institutions that span Libya’s geographic divide, would once again be vulnerable to interruption.

This is the scenario Article 4 was intended to avoid. In present circumstances, it could inadvertently enable it.

The Case for a Structured Process

Avoiding that outcome requires treating Article 4 not as self-executing law, but as a framework requiring agreed implementation.

The core objective should be to convert a potentially destabilizing vacancy into a controlled, time-limited transition that preserves continuity while enabling a legitimate replacement process.

A credible approach would rest on a small number of elements.

First, a clear and agreed protocol for determining vacancy or incapacity. 

Because Article 4 is silent on this point, the threshold question must be resolved politically, not litigated in real time.

A practical solution would involve a combination of medical attestation, acknowledgment by the Presidential Council acting as the LPA’s collective head of state and a domestic guarantor of continuity, and formal notification by the House of Representatives, with immediate communication to the High Council of State and the United Nations.

Second, immediate transition to a tightly constrained caretaker government. 

The outgoing government, deemed resigned under Article 4, would continue only to perform essential functions.

One of the existing deputy prime ministers could be designated as acting head for this limited purpose. The caretaker’s authority would need to be explicitly bounded: no major security appointments, no long-term financial or energy commitments, and no structural institutional changes. The narrower the interim mandate, the lower the incentive to contest it.

Third, a time-bound, joint selection process anchored in the agreement’s requirement for consultation between the House of Representatives and the High Council of State. 

A small joint committee, operating under agreed criteria and timelines, could produce a shortlist of candidates for prime minister within a defined period. The aim would be to force convergence, or at least structured negotiation, rather than unilateral designation.

Fourth, a visible but limited role for the Presidential Council and the United Nations Support Mission in Libya (UNSMIL). 

Neither can impose a solution, but both can help structure one. The Presidential Council can act as a domestic guarantor of continuity, while the United Nations can provide procedural support and reinforce expectations regarding legitimacy.

Finally, a defined fallback mechanism in the event of deadlock. 

If the House-High Council process fails, a narrowly scoped political dialogue mechanism, drawing on existing UN frameworks and potentially anchored in Article 64 of the agreement, could be convened with a limited mandate to resolve the impasse on executive formation.

None of these steps are likely to emerge organically from Libya’s current political dynamics. They would require external alignment and active facilitation.

In practice, that means re-engagement by key European and regional actors, in alignment with the United States, to coalesce around a common approach using their diplomatic and economic leverage to support a UN-convened process.

UNSMIL remains the only forum capable of structuring such an effort, but it can do so effectively only with coordinated backing. Under current conditions, such a process is unlikely to produce agreement in advance of a crisis.

Its value lies in doing the work ahead of time: identifying what a transition would require, establishing how it could proceed, and making clear that the House of Representatives and High Council of State will shape any outcome, whether as participants or as obstacles.

Without that groundwork, when a succession moment comes, events are likely to be driven by high-risk competition on the ground rather than any agreed process.

Conclusion

Libya does not face an imminent succession crisis, but it faces a plausible one, in a context where the stakes are even higher than usual. The combination of leadership uncertainty, legal ambiguity, economic strain, and geopolitical pressure creates a narrow window in which preparation can make the difference between controlled transition and renewed fragmentation.

Article 4 of the LPA provides a starting point. On its own, it is insufficient. With a modest but deliberate implementing framework that aligns external diplomatic efforts with Libya’s formal institutional requirements, the LPA can still serve its intended purpose: not to decide who governs Libya next, but to ensure that the question is answered without destabilizing the country in the process.

***

Jonathan M. Winer is a Distinguished Diplomatic Fellow at the Middle East Institute.

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Jonathan M. Winer

Libya’s stability has taken on renewed strategic importance as the impact of the United States and Israel’s war with Iran reverberates through global energy markets, pushing Brent crude prices to a three-year high as of mid-March.

Disruptions to shipping, heightened risk premiums, and constrained spare capacity have sharpened attention on every marginal barrel. In that environment, Libya’s oil production, stable for now under informal arrangements but structurally fragile, matters more than usual.

Sustaining existing Libyan production, and potentially increasing it, depends on a governing arrangement capable of keeping ports open, pipelines flowing, and revenues distributed without triggering conflict.

The arrangements that have been maintaining Libyan oil production at 1.2-1.3 million barrels per day, roughly 1% of global supply, are under growing strain as the North African country’s economic situation deteriorates. 

Liquidity shortages in dinars, limited access to foreign currency, and periodic fuel constraints are increasingly affecting daily life. At the same time, the Libyan dinar continues to weaken against the hard currencies required to import food and refined fuel.

Since early 2025, the official exchange rate has moved from roughly 5.6 dinars per US dollar to approximately 6.3-6.4 following successive devaluations, while the parallel black market rate has at times reached 9-10 dinars per dollar, putting increasing stress on Libyan consumers in a country heavily dependent on imports for food and fuel.

The gap between official and parallel exchange rates is not simply a monetary distortion. It is a mechanism that Libyan elites employ to manipulate access to and distribution of state resources, enrich themselves by arbitrage, and compete for political power.

These dynamics are increasingly manifesting in heightened friction among Libya’s diverse security actors. While large-scale conflict has not resumed, armed groups linked to state institutions are again jockeying for position, particularly around access to revenue streams, fuel distribution, and territorial control. In Libya’s recent history, such patterns have often preceded more overt confrontation.

Questions Surrounding Leadership Successions

Adding to the potential for renewed conflict, there are important questions emerging about the longevity of the principal figures leading Libya’s eastern and western power structures.

Abdul Hamid Dbeibeh, prime minister of the internationally recognized Government of National Unity in Tripoli, has experienced publicly reported and acknowledged health issues in recent months. While the official characterization has been of routine or manageable medical events, the pattern of recurrence has raised questions among Libyan insiders about continuity of leadership.

At the same time, Khalifa Hifter, who dominates the military and political structure in eastern Libya and exerts influence across much of the south, is 82 years old and has a history of health problems.

Both men may remain in place for the foreseeable future. But if either were to become unable to govern, or if uncertainty about their capacity were to become widely accepted among elite actors, Libya would face a familiar but still unresolved question: not only who succeeds, but how succession occurs in a system that lacks a single, uncontested constitutional chain of authority.

Libya’s political trajectory is shaped not only by formal institutions but by evolving patterns of de facto authority. In eastern Libya, the consolidation of power within the Hifter family has raised the prospect of a managed succession that may not align with formal political processes, while in Tripoli, governance is widely understood to depend on members of the Dbeibeh family operating within a narrow inner circle.

These dynamics do not predetermine outcomes, and they may be subject to negotiation or accommodation. But they underscore a central reality: Succession in Libya is unlikely to be resolved solely through formal legal mechanisms, and any durable process will need to account for the underlying distribution of power as well as the requirements of law.

The consequences of getting that question wrong are not abstract. Libya’s recent history demonstrates that disputes over executive legitimacy translate quickly into disruptions in oil production, fragmentation of fiscal authority, and localized or national conflict.

While oil production in Libya has been comparatively stable in recent years, it is still subject to politically driven disruption, as reflected in a late March attack on the Sharara field, where authorities recovered Russian-made munitions from a damaged crude pipeline.

In past conflicts, output has fallen to a few hundred thousand barrels per day, and at times far lower. A disruption of that magnitude would remove on the order of 1 million barrels per day from global supply at a time when the global economy can least afford it.

Oil markets are structurally sensitive to supply shocks: Historical analysis suggests that a disruption of roughly 10% of global supply can produce price increases on the order of 35-40%, reflecting the low short-term elasticity of both supply and demand.

Under this framework, a 1% decline in global supply would ordinarily increase prices by only a few percentage points.

In the current environment, however, with commercial shipping through the Strait of Hormuz effectively halted, additional risk to Red Sea transit as the Houthis have entered the conflict, and energy markets already under acute strain, a collapse of Libyan oil production could plausibly push global prices significantly higher and amplify existing volatility.

The Legal Framework and Its Limits

On paper, Libya does possess a governing framework for executive transition. The 2015 Libyan Political Agreement (LPA), still embedded in the country’s constitutional architecture, addresses any vacancy at the top of government.

Article 4 of the agreement provides that if the office of prime minister becomes vacant “for any reason whatsoever,” the entire government is deemed to have resigned. The outgoing government continues only in a caretaker capacity, while a new prime minister is to be selected through a consultative process involving the House of Representatives, controlled by its 82-year-old speaker, Aguila Saleh, and the consultative body established by the LPA, the High Council of State.

This provision is often cited as a mechanism for orderly transition. In practice, it is better understood as a trigger for institutional reset without a clear mechanism to execute it.

In such a situation, Tripoli-based actors would have strong incentives to control and maintain the caretaker government in Libya’s west and to slow, if possible, any action by the House of Representatives, based in the eastern coastal city of Tobruk and aligned with eastern authorities operating from Benghazi, to appoint a successor, including by asserting that required consultations with the Tripoli-based High Council of State had not been properly conducted and that any such appointment would therefore lack legal validity.

That divergence has the potential to reignite divisions left by Hifter’s April 2019 offensive to seize western Libya, which ended in 2020 after Turkish drone and air-defense support shifted the battlefield balance and halted his advance on Tripoli, following a conflict that killed more than 2,000 Libyans.

In the absence of a clear and accepted mechanism for succession, disputes over process risk becoming vehicles for broader contests over power within Libya’s rival political and security structures.

***

Jonathan M. Winer is a Distinguished Diplomatic Fellow at the Middle East Institute.

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The Fuel Import Racket

Libya’s soaring fuel import bill is a central piece of the new political setup. Available data indicate that, since 2022, Libya has nearly doubled its annual spending on imported diesel and gasoline. Most of it comes from Europe, around 50 per cent of it from EU member states and 25 per cent from Russia (though imports from Moscow have reportedly declined significantly in 2026 to date).

The Libyan state pays for the fuel in full, before selling it at a heavily subsidised price on the domestic market. These imports far exceed the needs of a country with a small population and minimal industrial activity, especially one that has refineries of its own. According to official Libyan sources, including from the Audit Bureau, between 2022 and 2024 roughly 40 per cent of the imported fuel was eventually smuggled abroad, primarily across the Mediterranean.

Subsidies sustain this trade: gasoline costs about $0.02 per litre in Libya, compared to roughly $2 per litre in Europe, creating enormous profit margins for traffickers. Foreign analysts and Libyan sources believe that most of the trafficked fuel departs from Benghazi with coordination by people tied to the Haftars. Most is sold in international waters in ship-to-ship transfers, but cargo is known to have reached Italy, Albania, Türkiye and Greece. 

Estimates of the racket’s total cost to Libya vary enormously. According to the Audit Bureau, in 2024 fuel import costs exceeded $9 billion, equivalent to roughly 30 per cent of the country’s gross hydrocarbon revenues, or about the same proportion of total annual state expenditure.

Other sources point to lower figures. As for fuel trafficking, some Libyan and foreign analysts suggest that it generated $6-7 billion annually between 2022 and 2024, while the public prosecutor has offered a more conservative estimate of $1.5 billion per year. 

These multi-billion-dollar sums suggest that fuel smuggling has become a vital component of the arrangement between eastern and western authorities. Libya’s leaders tolerate and, in some cases, encourage these illicit financial schemes because they are a means of cultivating patronage networks and funding off-budget expenses, especially in the east.

Foreign capitals are aware of this racket and other parallel funding schemes that cost the state billions of dollars, but they have so far preferred to keep quiet about the matter. Their belief is that this money will ensure that Libya’s peace does not unravel and that crude oil exports from areas under Haftar’s control will continue.

What is at Stake for the EU

Libya is strategically important to the EU. Its location in the centre of the Mediterranean basin, just across the water from Italy and Greece, make it a potential security liability. A number of countries at odds with various European states, including Russia and Türkiye, have forces stationed in the country, at at least half a dozen bases and airfields, under the umbrella of one Libyan military coalition or the other.

Libya also remains the main transit point for migrants seeking to enter Europe via the central Mediterranean route. Lastly, the country is still a major hydrocarbon supplier. Though the EU’s dependence on Libyan oil and gas has diminished in recent years, imports from Libya still help offset the fall in imports from Russia after its all-out invasion of Ukraine.

The EU has certainly not been inactive. In March 2025, it expanded the mandate of its Common Security and Defence Policy naval mission EUNAVFOR MED IRINI (hereafter, Irini) to address illicit trafficking of items other than arms, including monitoring, surveillance and information gathering related to illegal exports of oil and refined fuel products from Libya.

Both Irini and the EU’s border assistance mission in Libya, EUBAM, have trained Libyan border control agencies, including the coast guard, and they are considering stepping up joint training of law enforcement personnel from Libya’s east and west, in the hope that an integrated, nationwide security apparatus might foster a greater spirit of political compromise. 

But the EU and its member states have otherwise struggled to translate their priorities into tangible results. Libya’s persistent institutional divides and the Europeans’ limited leverage vis-à-vis other, more assertive players, such as Egypt, Türkiye and the UAE, have reduced the impact of EU policy in Libya.

Tackling migration flows has been especially complex, not least because of domestic political considerations in EU member states and because Libyan authorities have exploited migrants as a form of coercive diplomacy, leveraging control of routes to extract bilateral concessions.

As a result, EU member states have had to make difficult policy compromises. They have generally found it easier to focus on bilateral relations with Libyan authorities rather than work together through Brussels. For example, they were forced to seek the cooperation of Khalifa Haftar and his sons after 2024, when it became apparent that a growing number of migrants heading to Italy were coming from the east. Following demands from the Haftar camp, Italy began offering military training in Italy to his security personnel, breaking with previous policy under which they would only train forces affiliated with Tripoli. 

Europe’s struggles to establish an effective policy toward Libya continue. As it reconsiders its priorities, it should consider turning its focus to stopping fuel smuggling and the haemorrhaging of Libyan public funds, which pose long-term risks of political instability and rising public discontent. Compared with the U.S. Treasury, which plays a central role in overseeing dollar-denominated transactions in the oil sector, the EU has limited leverage over financial decision-making in Libya.

But the EU and its member states have repeatedly reaffirmed that they are committed to stopping fuel smuggling in Libya: the 2017 Memorandum of Understanding between Italy and Libya on fighting illegal migration puts cooperation against fuel smuggling among its objectives, while the Irini naval mission lists countering fuel smuggling as its secondary mandate.

Until now, however, the conditions under which the mission works have militated against efforts to combat fuel smuggling. In particular, its mandate does not allow for interception of vessels on mere suspicion of smuggling fuel.

Additional Security Council sanctions measures do permit interdiction if the designated Libyan government contact signals that the cargo is suspect. But no such signal has arrived in recent years, despite the massive smuggling of subsidised fuel, largely because of the complicity of government agencies and their political bosses. 

At the same time, the bloc and its member states should act only when they are prepared for the likely consequences of trying to stymie the racket. One possible type of backlash could be a resurgence of migration flows under the watch of eastern Libyan authorities aggrieved by Europe’s interference in its funding streams. Eastern authorities might also be provoked into reigniting hostilities with Tripoli.

For these reasons, any stronger EU push to curb fuel trafficking should be part of a comprehensive and internationally coordinated approach that would ideally bring together UN- and U.S.-led mediation efforts to put Libya’s state finances in order.

Simultaneously, the EU could also seek to coax both rival Libyan governments into cooperating by helping improve the country’s paltry maritime security infrastructure, complementing U.S.-backed efforts to promote joint military training of Libyan forces from the east and west of the country. This assistance would also be in line with the EU’s view that the Mediterranean is a strategic maritime domain that requires sustained European attention. 

The EU and its member states should:

Increase policy coherence. The EU and its member states should work more consistently through EU structures in Brussels and in coordination with the UN to push for progress in the governance, economy, security and reconciliation/human rights tracks of any UN-led initiative, be it the Structured Dialogue or other future talks.

Holding nationwide elections should not be the immediate goal of these initiatives. Instead, the priority should be to achieve incremental successes, especially in matters of financial governance and security cooperation, so as to create the conditions for a future political transition. 

Work with others to encourage economic governance reform. In coordination with regional powers like Egypt, Türkiye and the UAE, and relevant international financial institutions, such as the IMF and the World Bank, the EU and its member states should ask the UN mission in Libya to work more proactively on improving Libya’s public financial management with the aim of curbing the haemorrhaging of state funds and bolstering economic governance.

They should also encourage the U.S., which is already playing a role in overseeing and convening discussions on Libyan finance-related matters, to coordinate more with the above countries and institutions, including the EU. 

Counter fuel smuggling. As part of these coordinated efforts to improve Libya’s economic governance, the EU and its member states should also advocate for changing the UN Security Council resolution on Libya to permit interception of vessels suspected of smuggling fuel in international waters, even in the absence of notification by Libyan officials.

With such licence from the Council, the EU could take a more proactive role in countering fuel smuggling across the Mediterranean by expanding Irini’s mandate and placing greater resources at its disposal.

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Safiyah Nassif

Although Libya avoided a full shutdown at Sharara, the pipeline fire has renewed attention on a quieter economic risk facing the oil sector: the strength of the network that keeps crude moving.

The fire that broke out on Sharara’s export pipeline this week did not produce the kind of dramatic shutdown headline that often defines Libya’s oil story. According to the National Oil Corporation, the blaze was caused by a valve leak, there were no casualties, and flows were redirected through alternative pipelines so production could continue while maintenance and damage assessments were carried out. For a field with capacity of roughly 300,000 to 320,000 barrels per day, that distinction matters.

In one sense, this is reassuring news. Libya avoided a full outage at its largest oil field, and NOC’s ability to reroute crude through the El Feel line to Mellitah and via Hamada to storage in Zawiya suggests that parts of the system still remain operational. At a time when oil is trading near the $100 Brentmark, that is more than a technical success. At 300,000 barrels per day, a full shutdown would imply around $30 million a day in gross crude value before costs and discounts, which shows how quickly even a short disruption at Sharara can become economically impactful.

But the deeper significance of the incident lies elsewhere. What happened at Sharara is a reminder that Libya’s oil vulnerability is not only political, and not only visible when production collapses outright, but also infrastructural. This means the real risk can sit quietly in the transport system itself, only becoming obvious when a leak, a fire, or a weak point suddenly interrupts the normal movement of crude.

That is an important shift in perspective. Observers usually explain Libya’s oil disruptions through protests, blockades, and force majeure, and Sharara has experienced each of them. Reuters reported in January 2024 that protests in Fezzan shut the field completely and led NOC to declare force majeure, while renewed unrest in the south cut production again later that year. Those episodes were clearly political in nature and easy to identify as such.

This week’s fire belongs to a different category. It does not point first to a standoff on the ground or to a closure imposed from outside. Instead, it draws attention to the quieter economics of infrastructure integrity. A field can remain productive, open, and commercially valuable, yet still become vulnerable if the network of pipelines, valves, and storage links that carries its crude is under strain. In oil producing countries, those midstream assets rarely receive the same attention as output figures, licensing rounds, or export revenues, but they are what turn production capacity into reliable supply.

Libya has experienced signs of all this before. In May 2025, an oil leak forced the shutdown of a pipeline south of Zawiya, where the country’s largest functioning refinery, with capacity of 120,000 barrels per day, is linked to crude flows from Sharara and Hamada. NOC moved quickly to stop the leak and contain the environmental damage, but the event still served as a reminder that technical failures can create economic risk even when they do not become full scale national crises.

Taken together, these incidents suggest that Libya’s oil challenge is broader than the headline cycle often implies. The country is not only managing the risk of sudden stoppages. It is also managing the slower, less dramatic problem of continuity, which in many ways is just as important. Buyers care about barrels, but they also care about confidence. Even when output continues, repeated infrastructure incidents can still shape perceptions of reliability, raise questions about maintenance and monitoring, and remind the market that resilience depends on more than what the field itself can pump.

None of this means the Sharara fire should be read as evidence of systemic failure. In fact, the opposite reading is partly true as well. Libya did not lose full production, and that says something useful about the adaptability of the current network. The country was able to limit the immediate damage through rerouting, which is exactly what redundancy is meant to do. That is worth emphasizing, particularly in a sector where even temporary outages can unsettle revenue expectations and export schedules.

Still, the episode leaves behind a clear economic lesson. Libya’s oil future will depend on more than the size of its reserves or the headline level of its output. It will depend just as much on whether crude can move safely, consistently, and at low enough operational risk from field to terminal. New exploration rounds and fresh upstream ambitions can attract attention, but they sit on top of a more basic requirement: the physical network has to keep working under pressure.

That is what makes the Sharara incident more than a one day operational update. The field stayed online, and that is the immediate good news. Yet the fire also highlighted a quieter truth about Libya’s oil economy. Its greatest vulnerabilities may not always arrive in the form of dramatic shutdowns. Sometimes they appear in the technical weak points that do not stop the system outright, but still reveal how much depends on infrastructure that must work flawlessly every day.

Sharara did not go offline, and that is precisely why this story deserves attention. Libya’s oil resilience depends not only on how much the country can produce, but on how well the system absorbs disruption before a technical incident turns into a wider economic loss.

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