The Strait of Hormuz is only 39 km (24 mi) wide at its narrowest point. And yet, typically 20 million barrels of oil flow through each day – about 25 percent of the world’s seaborne oil trade.
That was until the United States and Israel launched attacks on Iran in late February and Tehran responded by closing the strait. Brent crude oil prices have since risen to nearly $120 a barrel, forcing Gulf producers to cut output and pipeline routes that bypass the Strait of Hormuz can carry only 5 million to 6 million barrels per day.
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The world has a chokepoint problem it can’t solve. But what is not taken into account is that a second chokepoint is forming at Europe’s southern door, through a different mechanism and a different set of actors moving towards the same outcome.
Libya’s location should make it strategically valuable to global oil trade. Its crude oil is loaded at terminals on its northeastern coast and reaches Italian refineries in 48 hours on routes that – unlike oil coming from the Gulf during wartime – require no military escort, no war-risk premium and no detour around Southern Africa.
Libya also produces the lighter, sweeter grades of oil that European refiners now need. In late March, Egypt formally announced that the market was already indicating that it was securing approximately 1 million barrels per month from Libya to address the Hormuz disruptions.
Europe has seen opportunities in its southern energy neighborhood before, and European policymakers have a reliable habit of not examining sources too closely as long as supplies last. That habit has led to Europe’s dependence on Russian gas, which remains a large share of EU gas imports despite the war in Ukraine. It is this same habit that is now shaping Europe’s relationship with Libyan oil. And the bill is about to come due once again.
cartel oil deals
Libya has not had a functioning government since 2014. In the west is the internationally recognized Government of National Unity (GNU) led by Abdul Hamid Dbeibah, based in Tripoli. In the east, rebel military commander Khalifa Haftar controls the area through military force. Haftar’s forces – the self-styled Libyan National Army (LNA) – control the land where Libya’s oil actually is: major export terminals on the northeastern coast, the largest fields in the far southwest and productive areas in the southeast.
Tripoli may sign the oil contracts, but it is Haftar who decides whether anything actually flows.
Whenever a political dispute is unresolved, their forces have cut off oil supplies. Ports may be closed. Protests at pipeline junctions and field gates, organized by tribal mediators, could occur and end once a settlement is reached. Oil can flow again – but at a cost.
In 2022, during another acute European energy crisis as a result of Russia’s invasion of Ukraine, bargaining in Libya took place not between governments, but between individuals: GNU national security adviser Ibrahim Dbeibah and Saddam Haftar, the LNA’s deputy commander and son of the Caliph.
The arrangement they reached in Abu Dhabi included the creation of Arkenu, a private oil company formerly incorporated and linked to the Haftar family, designed to channel oil revenues outside Tripoli’s control.
This kept the fields open. But what it did do, as the latest UN panel of experts confirmed in a report leaked in late March, was systematically drain the Libyan state coffers – millions of barrels exported through Arcenu and billions of oil revenues diverted to private accounts abroad. Crude oil reached European refineries; However, the money never reached the Libyan state.
elite deals
On Thursday, Tripoli ended the Arcanu agreement. The stated reason was corruption, diverting oil revenues from the Central Bank of Libya. But the immediate danger is that the system to maintain the flow of Libyan oil has collapsed and nothing credible has been agreed to replace it.
The US is trying to broker new talks between Tripoli and Haftar’s camp, led by senior Trump adviser Massad Boulos, through meetings in Paris and Tunis.
The talks focused on unifying the national budget and stabilizing the economy, deliberately sidestepping the elections in favor of an agreement between the same factions that created Arcenu.
It is the same transactional logic: stability without accountability, commercial arrangements without democratic legitimacy, and limits imposed on Libyan political life so that oil can keep rising.
The deal is still not confirmed. Haftar’s own son has already publicly rejected some of the talks’ outcomes as non-binding. As of this week, progress has been limited, and all the privileges Haftar has always held remain intact. Oil ports could be closed again before any replacement framework can be agreed, leaving Europe struggling to find solutions to its energy dilemmas.
While the political system is settling, the European conflict is also affecting Libyan waters.
Iran has turned energy infrastructure in the Strait of Hormuz into a battlefield. A similar dynamic upwelling has been observed in the Mediterranean Sea. On March 3, Ukrainian naval drones were reportedly launched off the Libyan coast near the Melita oil and gas complex and attacked the Arctic Metagaz, a liquefied natural gas tanker that is part of Russia’s shadow fleet assembled to evade sanctions on Russian energy. The ship was damaged while en route to Egypt and has since been drifting in Libyan waters.
Two weeks later, on March 17, an explosion caused a fire in one of the export pipelines for the Sharara oil field in the Hamada region of south-western Libya.
Investigators reportedly recovered Russian-made weapons at the scene, including an M-62 aerial bomb and 130 mm rocket fragments, raising suspicions of sabotage.
In Hormuz, tankers are blocked and attacked. In the Mediterranean Sea, tankers are attacked and left adrift. The mechanism is different. There is no threat to supply.
The Hormuz crisis is not a function of geography. This is what happens when diplomacy is abandoned and war is chosen.
The Mediterranean Sea is not a narrow strait. It cannot be blocked. And yet tankers are being attacked on it, pipelines are being blown up in the desert across it and the proxy war that was once played out between Libyan factions is now being played out between Russia and Ukraine – but on Libya’s oil infrastructure and on the doorstep of Europe.
