Libya today sits at a strategic inflection point where the politics of partition and the politics of oil have become inseparable. The United Nations has repeatedly warned that Libya risks slipping into de facto partition if political deadlock continues and institutions remain bifurcated. That warning is not rhetorical. Control over oil production and export infrastructure has repeatedly been the instrument used to defend interests, to coerce rivals, and to make fractures durable rather than temporary.
Since 2011 Libya’s hydrocarbon wealth has been the single most important lever of power. The state oil company, the National Oil Corporation (NOC), nominally headquartered in Tripoli, administers production and exports that fund the budget and underpin patronage networks across regions. Yet the reality on the ground has been far more fragmented. Many of the major fields and terminals lie in areas where eastern forces and allied local actors exercise security control. Those on-the-ground control relationships have made oil a bargaining chip in political rows over the central bank, budgets, and appointments. When politics escalates, production stops - and that stoppage is the most immediate and painful sanction that rival Libyan elites can apply to one another.
The pattern of coercive shut-downs is instructive. In August 2024 an eastern-based administration announced closures of oilfields under its influence amid a dispute over the central bank, producing an abrupt fall in exports and revenues. NOC responses, force majeure declarations at specific fields, and cancelled cargoes followed across late summer and early autumn of 2024 before operations were restored once a limited political accommodation was reached. Those episodes underline two linked facts: physical control matters, and the technical/legal authority of the NOC and the central bank matters less when armed actors can and will interrupt flows.
These tactical stoppages also create strategic incentives for partition. A region that can field security forces sufficient to protect oil installations effectively holds a revenue-producing statelet in potentio. Over time the capacity to extract and export petroleum can underpin a parallel administration with its own budget and payrolls. That dynamic was precisely what UN envoys described when they cautioned the Security Council that prolonged interim arrangements and stalled elections deepen the risk of territorial and institutional division. In short, the longer a single unified political settlement is delayed, the more likely that financial autonomy tied to hydrocarbons will harden separatist or federal tendencies.
The international community has noticed the problem and taken steps aimed at reducing the adulteration of Libya’s oil economy by illicit trade and by actors who exploit petroleum for private gain. The UN Security Council updated its sanctions and the criteria for designating those who profit from illicit exports in mid-January 2025, a move meant to make it harder to normalise a parallel hydrocarbon market that would sustain fragmentation. Those decisions are significant because they acknowledge that the oil sector is not just an economic prize but a vector for geopolitical manipulation.
Despite such measures, however, three stubborn realities persist. First, local security arrangements around fields and terminals remain highly decentralized. Second, the institutional architecture that would insulate oil administration from politics - a neutral NOC, a unified central bank, transparent revenue-sharing mechanisms - is fragile and intermittently bypassed. Third, external patrons prize access to Libya’s hydrocarbons and sometimes tolerate, if not reward, the very behaviours that undermine national unity. Together these dynamics ensure that oil will continue to be usable as leverage unless policy and diplomatic action change the incentives.
For policymakers who want to prevent partition and to stabilise Libya over the long term, the implications are clear. First, international efforts should prioritize institutional guarantees that separate oil operations from short-term political fights. That means supporting NOC neutrality and buttressing the central bank’s role as the legitimate repository and disbursing authority for hydrocarbon revenues. Second, revenue-sharing mechanisms must be made both transparent and automatic so that halting exports cannot be used to extract unilateral concessions. Third, targeted sanctions and maritime/port interdiction mechanisms should be maintained and refined to deter illicit exports that would give a breakaway economy lifelines. The UN Security Council’s January 2025 measures are a step in this direction, but they must be enforced coherently and consistently by regional states and major trading partners.
Finally, diplomacy must be realistic about the asymmetry between land and resource control. Any settlement that would simply paper over the reality of who holds which oilfields and terminals is unlikely to last. A durable political bargain will need to address security arrangements around energy infrastructure, provide credible guarantees for management of revenues, and offer political pathways for local actors to transition from wartime patrons to stakeholders in a unified state. If the international community instead treats oil as a background economic issue rather than the engine of power that it is, then the risk is that partition will become not a contingency but an outcome.
Preventing partition is not only about preserving Libya as a single territorial state. It is also about stopping a longer-term process by which hydrocarbons are converted into independent governing capacity through steady revenue capture, external partnerships, and militarized protection. Those are precisely the processes the UN has been warning about. Barring decisive moves to depoliticize oil administration and to align on revenue management, Libya’s hydrocarbons will continue to be the decisive bargaining chip shaping its political geography.