The British newspaper Financial Times reported today, Saturday, that Libya is reaping significant gains from the conflict in Iran amid rising oil prices, with production reaching its highest level in more than a decade. However, this boom risks fueling the armed factions that have divided the country.
According to the report, demand for Libyan oil barrels has increased notably as a substitute for lost supplies from the Arabian Gulf region.
The newspaper explained that international oil companies have flocked to Libya in recent years in search of new reserves. With more than one-fifth of global crude oil production disrupted due to the closure of the Strait of Hormuz, buyers are seeking alternatives, leading to increased demand for Libya’s high-quality crude.
The report noted that Libya’s economy depends entirely on oil exports as a source of foreign income. However, analysts believe that the country’s opaque financial situation, widespread corruption, and division between rival authorities in the east and west may result in enriching politicians and armed groups rather than benefiting Libyan citizens, who are already facing rising prices and worsening poverty.
“There is a long record of state fund embezzlement,” said Claudia Gazzini, Senior Libya Analyst at the International Crisis Group. She warned that there is a high likelihood that increased revenues will follow the same pattern of mismanagement and embezzlement.
According to the United Nations, armed groups dominate Libya’s political life, have infiltrated state institutions and the security sector, and have plundered the country’s wealth.
The newspaper added that in the current situation, armed groups have become the primary actors shaping governance by providing “a cover of impunity” for those generating continuously increasing revenue flows. This is based on a report commissioned by the United Nations, prepared by a panel of experts and submitted to the Security Council in March. The report named members of both eastern and western systems as facilitators of oil revenue looting by protecting officials who served the interests of competing armed networks.
Experts stated that “the scale and level of organization of illicit petroleum exports—whether crude oil or refined products—reached unprecedented levels during 2025.”
An economic expert, Eaton, noted that it is extremely difficult to eliminate corruption without a structured budget and transparent expenditure reporting.
He added that foreign currency generated from oil revenues would ease pressure on reserves and help reduce inflation, after prices of some goods increased by 40% to 50% over the past six months, according to the newspaper.
