In Libya, a feud over control of the central bank and petrodollars has caused a significant drop in oil production and exports, impacting global markets. The closure of oil fields in eastern Libya led to a reduction of 700,000 barrels per day in production, affecting key Mediterranean players. With Africa’s largest proven oil reserves, Libya’s role in the oil market is crucial, and recent political tensions have made it a wildcard for 2025.
The dispute stems from a power struggle between rival governments, one led by Abdul Hamid Dbeibeh in Tripoli and the other by Field Marshal Khalifa Haftar in the east. The central bank’s role in revenue sharing has been a point of contention, leading to closures and disruptions. Despite international efforts to reduce tensions, fears of a wider conflict remain.
The instability in Libya, worsened by external powers backing different factions, poses risks of economic collapse and potential conflict escalation. As the country’s oil revenues are vital for its economy, any further disruptions could have severe consequences. The situation highlights the complex dynamics and power struggles in Libya, with no clear resolution in sight.