The Strait of Hormuz is only 39km (24 miles) wide at its narrowest point. And yet, 20 million barrels of oil would typically flow through it every day – about 25 percent of the world’s maritime oil trade.
That was until the United States and Israel launched strikes on Iran in late February and Tehran responded by closing the strait. Brent crude oil prices have since soared to nearly $120 a barrel, Gulf producers have been forced to cut production and the pipeline routes that bypass the Strait of Hormuz can move only 5 million to 6 million barrels a day.
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The world has a chokepoint problem it cannot solve. But what has not been noticed is that a second chokepoint is forming on Europe’s southern doorstep through a different mechanism and with a different cast of actors moving towards the same result.
Libya’s location should make it strategically valuable to the global oil trade. Its crude oil loads at terminals on its northeastern coast and reaches Italian refineries in 48 hours on routes that – unlike oil coming from the Gulf at times of war – require no military escorts, no war-risk premiums and no detour around Southern Africa.
Libya also produces the light, sweet grades of oil that European refiners now need. In late March, Egypt formalised what markets were already signalling, announcing it was securing roughly 1 million barrels a month from Libya to offset Hormuz disruptions.
Europe has seen opportunities in its southern energy neighbourhood before, and European policymakers have a reliable habit of not scrutinising the sources too closely as long as the supplies keep flowing. That habit is what created Europe’s dependence on Russian gas, which continues to make up a sizeable proportion of European Union gas imports despite the war in Ukraine. It is also the same habit that is now shaping Europe’s relationship with Libyan oil. And the bill, once again, is coming due.
Factional oil deals
Libya has not had a single functioning government since 2014. In the west sits the internationally recognised Government of National Unity (GNU) under Abdul Hamid Dbeibah based in Tripoli. In the east, renegade military commander Khalifa Haftar controls territory through military force. Haftar’s forces – the self-styled Libyan National Army (LNA) – hold the ground where Libya’s oil actually is: the major export terminals on the northeastern coast, the largest field in the remote southwest and the productive fields of the southeast.
Tripoli may sign the oil contracts, but it is Haftar who decides whether anything actually flows.
Whenever a political dispute has gone unresolved, his forces have stopped the oil moving. The ports may close. Protests might materialise at pipeline junctions and field gates, organised by tribal intermediaries and dissolving the moment a deal is struck. The oil can flow again – but a price has to be paid.
In 2022, during another acute European energy crisis as a result of Russia’s invasion of Ukraine, a bargain in Libya was struck not between governments, but between individuals: Ibrahim Dbeibah, the GNU’s national security adviser, and Saddam Haftar, the LNA’s deputy commander and Khalifa’s son.
The arrangement they reached in Abu Dhabi included the creation of Arkenu, a private oil company incorporated in the east and linked to the Haftar family, designed to channel oil revenues outside Tripoli’s control.
It kept the fields open. But what it also did, as the latest United Nations Panel of Experts confirmed in a report leaked in late March, was systematically drain the coffers of the Libyan state – tens of millions of barrels exported through Arkenu and billions in oil revenues diverted to private accounts abroad. The crude oil did reach European refineries; however, the money never reached the Libyan state.
Elite deals
On Thursday, Tripoli terminated the Arkenu agreement. The stated reason was corruption, the diversion of oil revenues away from the Central Bank of Libya. But the immediate danger is that the arrangement keeping Libya’s oil flowing has collapsed and nothing credible has been agreed to replace it.
The US has been trying to broker new talks between Tripoli and Haftar’s camp, led by Trump’s senior adviser Massad Boulos, through meetings in Paris and Tunis.
The talks are focused on unifying the national budget and stabilising the economy, deliberately sidelining elections in favour of a deal between the same factions that produced Arkenu.
It is the same transactional logic: stability without accountability, commercial arrangements without democratic legitimacy and a ceiling imposed on Libyan political life so the oil keeps moving.
A deal is still not certain. Haftar’s own son has already publicly rejected some outcomes of the talks as nonbinding. As of this week, progress is limited, and Haftar retains every lever he has always had. The oil ports can be closed again before any replacement framework is agreed, leaving Europe scrambling to find a solution to its energy dilemmas.
While the political arrangement has been unravelling, a European conflict has also been impacting Libyan waters.
In the Strait of Hormuz, Iran has turned energy infrastructure into a battlefield. The Mediterranean has seen a similar dynamic emerge. On March 3, Ukrainian naval drones were allegedly launched from the Libyan coast near the Mellitah oil and gas complex and struck the Arctic Metagaz, a liquefied natural gas tanker that is part of Russia’s shadow fleet, assembled to avoid sanctions on Russian energy. The vessel was damaged while sailing for Egypt and has been drifting in Libyan waters ever since.
Two weeks later, on March 17, an explosion in one of the export pipelines for the Sharara oilfield in the Hamada area of southwestern Libya caused a fire.
Investigators reportedly recovered Russian-made munitions at the scene, including an M-62 aerial bomb and 130mm rocket fragments, causing sabotage to be suspected.
In Hormuz, tankers are blockaded and struck. In the Mediterranean, tankers are struck and left drifting. The mechanism is different. The threat to supply is not.
The Hormuz crisis is not an act of geography. It is what follows when diplomacy is abandoned and war is chosen.
The Mediterranean Sea is not a narrow strait. It cannot be blockaded. And yet tankers are being struck on it, pipelines blown up in the desert beyond it and the proxy wars that once played out between Libyan factions are now playing out between Russia and Ukraine – but on Libya’s oil infrastructure and on Europe’s doorstep.
