Edited by Ali Aadil khan
For Libya, the Hormuz Crisis Can Be a Trap or an Opportunity
Tripoli, September 27, 2026: The continuing crisis around the Strait of Hormuz is reshaping global energy markets—and for Libya, the disruption could prove to be both a major economic opportunity and a serious strategic trap.
Libya is not capable of replacing the Gulf’s enormous oil and gas exports. But its geographic position, large hydrocarbon reserves and direct access to the Mediterranean give it an important advantage at a time when European and international buyers are urgently looking for alternative energy supplies.
Unlike Gulf oil, which has traditionally depended heavily on routes through or around the Strait of Hormuz, Libyan crude reaches international markets through the Mediterranean. Libya also has the Greenstream gas pipeline, which connects the Mellitah complex directly with Italy and provides an existing route into the European energy market.
That geography suddenly matters much more in the current crisis.
Why Libya Is Suddenly Important
The Strait of Hormuz has been one of the world’s most important energy chokepoints. Disruptions there have forced producers, traders and governments to look for alternative routes and suppliers.
Reuters reported this month that Gulf producers are increasingly using ship-to-ship transfers near Oman to keep oil moving despite the risks surrounding Hormuz. The system has helped maintain supplies, but transportation costs have risen dramatically, with some VLCC freight costs exceeding $30 per barrel.
The result is a global search for energy sources that are less exposed to the Hormuz bottleneck.
And this is where Libya enters the picture.
Libya’s oil can move directly into the Mediterranean market without passing through Hormuz. That makes Libyan barrels particularly relevant to European refiners looking to diversify their supply.
Libya Has More Oil—and Is Producing More
Libya’s potential is not merely theoretical.
In April, Libya’s oil production reached around 1.43 million barrels per day, its highest level in more than a decade, according to The National. Libya’s National Oil Corporation has also been targeting production of around 2 million barrels per day by 2030.
The country also possesses Africa’s largest proven crude-oil reserves, estimated at roughly 48 billion barrels.
So, if international demand for non-Gulf crude remains elevated, Libya has something many countries do not:
oil, geographic access to Europe and the ability to export through Mediterranean terminals.
But Here Comes the Trap
The biggest obstacle may not be the international oil market.
It may be Libya itself.
Libya’s energy sector remains vulnerable to political divisions, armed groups and security disruptions.
And there is already a fresh warning.
On September 21, Libya’s National Oil Corporation reported that an armed group had shut a valve on the Sharara crude-oil pipeline, sharply reducing production at one of the country’s largest oil fields. Reuters reported that the incident highlighted the continuing security risks facing Libya’s oil infrastructure.
This is the paradox.
The world may desperately need more Libyan oil at exactly the moment when Libya is struggling to guarantee uninterrupted production.
That is why Hormuz could become either an opportunity—or a trap.
Europe Is Looking for Alternatives
The crisis has exposed Europe’s vulnerability to disruptions in Middle Eastern energy supplies.
The European Commission’s Joint Research Centre has warned that a prolonged Hormuz disruption could push oil prices dramatically higher and increase inflation across the European Union.
European governments therefore have a strong incentive to diversify suppliers and routes.
For Libya, this creates an opportunity to strengthen its position as a Mediterranean energy supplier.
But turning that opportunity into long-term economic gains requires more than simply selling additional barrels.
Libya needs reliable infrastructure, political stability, transparent institutions, investment and security around its oil fields and export terminals.
The Bigger Opportunity: Gas
Oil is only part of the story.
Libya’s Greenstream pipeline to Italy gives the country something particularly valuable in Europe’s energy strategy: an existing direct gas connection to the European market.
The Hormuz crisis has therefore increased the strategic importance of Mediterranean energy corridors.
Analysts at Chatham House have argued that the wider crisis is accelerating efforts to develop energy routes that bypass Hormuz, although political and infrastructure challenges remain substantial.
Libya could potentially benefit from this wider restructuring of regional energy trade.
But Can Libya Convert a Temporary Windfall Into Long-Term Development?
This is the crucial question.
Higher oil prices can increase government revenues. Increased demand can attract foreign investment. And higher production could strengthen Libya’s position in negotiations with European energy buyers.
But Libya’s economy remains overwhelmingly dependent on hydrocarbons.
The National reported earlier this year that oil and gas account for nearly 95 percent of Libya’s exports and government revenue. The same report highlighted the country’s political fragmentation, corruption concerns and unregulated spending as structural problems.
That creates a classic resource-dependence problem.
If Libya simply sells more oil whenever prices rise, it may enjoy a temporary financial boost.
But if the additional revenues are invested in infrastructure, electricity, education, industrial development and economic diversification, the current crisis could become a turning point.
Opportunity or Trap?
The answer may depend less on what happens in Hormuz—and more on what happens inside Libya.
If Libya can maintain production, protect its oil infrastructure, attract investment and establish a more stable political environment, the Hormuz crisis could give the country a rare strategic opening.
Europe needs alternative energy routes.
Global markets need diversified supplies.
And Libya has the resources and geography to participate.
But if political divisions, armed disruptions and institutional weaknesses continue to interrupt production, the opportunity could disappear just as quickly as it appeared.
In other words:
Hormuz may be creating the opportunity.
But Libya itself will determine whether that opportunity becomes a breakthrough—or another missed chance.
The real question is therefore not simply:
“Can Libya replace Gulf oil?” It cannot. The more realistic question is: “Can Libya use its Mediterranean position and hydrocarbon resources to become a more reliable part of the global energy system?”
That is the strategic opportunity emerging from the Hormuz crisis. And for Libya, the window may not remain open forever. inputs al jazeera