The oil-focused website Substack reported on Sunday that, for more than half a century, oil has been the cornerstone of Libya’s economy. It has funded public services, supported state institutions, and generated the vast majority of the country’s export revenues.
The website noted that, for many Libyans, oil is not merely a commodity but the economic backbone of the state.
According to the report, the global energy sector is undergoing a profound transformation. Renewable energy is becoming increasingly competitive, electric vehicles are capturing an unprecedented share of the market, and many countries are investing heavily in clean technologies. While oil is expected to remain an important component of the global energy mix for years to come, technological innovation and shifting investment patterns are reshaping long-term energy market expectations.
The report explained that Libya’s challenge is not whether oil will remain important tomorrow, but whether today’s oil revenues will be used to build a more diversified and resilient economy for future generations.
It further stated that, unlike countries with diversified economies, Libya remains heavily dependent on a single source of income. Oil and gas account for approximately 95% of Libya’s export earnings and more than 90% of government revenues. This level of dependence leaves the country highly vulnerable to fluctuations in global energy prices and demand.
The report added that when oil prices rise, public finances benefit. However, when prices fall or production is disrupted, the consequences affect the entire economy. This dependence limits economic flexibility and creates uncertainty for long-term development planning. The issue is not that Libya possesses oil, but rather that it has not developed sufficient alternative sources of growth.
The website also highlighted the growing use of the term “stranded assets” by economists to describe fossil fuel reserves that may become less valuable or uneconomical due to technological change, market developments, or climate policies. The risk is not that Libya’s oil reserves will suddenly become worthless, but that global demand growth could slow while competition among producers intensifies. In such a scenario, countries that diversify their economies and strengthen their competitiveness will be better positioned to adapt, while those relying on a single commodity may face greater challenges.
On the other hand, the report emphasized that Libya possesses significant advantages. The country enjoys some of the highest solar radiation levels in the Mediterranean region, has more than 1,700 kilometers of coastline, is located close to Europe, and already has developed energy infrastructure. These factors create promising opportunities in renewable energy and emerging industries such as green hydrogen.
The website noted that the European Union’s REPowerEU strategy includes a target of importing 10 million tonnes of renewable hydrogen annually by 2030. Several countries in North Africa and the Middle East have already launched large-scale hydrogen and renewable energy projects to position themselves within this growing market, according to the report.
