The U.S.-based Stimson Center revealed today, Thursday, that what began as a technical malfunction evolved into a more complex and revealing phenomenon. This came as part of a case study on how Libyan power structures have taken control of the state’s most important assets while maintaining a façade of legitimacy.
The “Arkenu case” is presented as a window into how Libya’s oil economy has been gradually 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 anomaly, but rather an evolution.
According to the Stimson Center, by 2024 Libya was importing approximately 37 million liters of fuel daily, while domestic consumption was around 24 million liters. The missing fuel did not simply disappear—it was redirected. Based on prevailing market prices, this translates into an estimated annual loss of about $6.7 billion from fuel alone.
When factoring in crude oil diversions, opaque barter agreements, and unreported exports, the total scale of leakage becomes massive.
Reports indicate that the company handled millions of barrels within months of starting operations, generating hundreds of millions of dollars in export value. However, a large portion of these revenues bypassed the Central Bank.
The Center estimates that between late 2024 and early 2026, more than $3 billion may have been diverted through channels linked to its operations. This was not theft in the traditional sense, but rather a systematic and institutionalized form of exploitation protected by layers of official state legitimacy.
The report noted that the conditions enabling this level of control were geographical, administrative, and financial—particularly in eastern and southern Libya. Networks loyal to the Haftar family strengthened their control over ports, transport routes, and key hubs within Libya’s oil distribution network.
This enabled them to operate a dual system: outwardly overseeing fuel distribution and security, while unofficially imposing taxes on fuel flows, redirecting them, and re-exporting them on a large scale.
The Center added that maritime routes witnessed the re-export of entire oil tanker shipments, sometimes through ship-to-ship transfers in international waters, concealing their origin and ownership. A single vessel can carry tens of millions of liters, making maritime smuggling the backbone of large-scale diversion operations.
On land, the system was more precise but equally effective. Checkpoints imposed informal taxes, distribution quotas were manipulated, and artificial shortages were created to push fuel into black markets.
The Center explained that Arkenu’s role becomes particularly clear here—not only as a participant in this system, but also as a facilitator of its financial layer. By operating as a private entity with privileged access, it built a bridge between state-controlled production and private external revenue channels. In doing so, it helped transform fragmented smuggling activities into something resembling an integrated shadow economy.
The question, then, is why this situation persisted—and why it took so long to confront it—according to the Center.
