This essay was edited and structured with the assistance of Claude, an AI writing tool. The research, analysis, and arguments are my own.

Late 2024, I was in Tunis at a meeting between the Libyan National Oil Company (NOC), their General Electricity Company (GECOL), and the Ministry of Planning (MOP) discussing the future of Libya's oil production in relation to its wider economy. The parties were deep in argument over whether to keep swapping crude oil for processed fuel, an arrangement rife with opportunities for corruption and mismanagement, or to invest in their own refineries, a massive undertaking with a decades-long return horizon. The argument began to get heated when the colleague from the IMF, matter-of-factly, dropped a line that stopped the conversation:

Oil has 20 years as a global commodity. Tops

I'm paraphrasing liberally, but you could have heard a pin drop in that room. Not forty. Not thirty. Twenty.

Nobody in the room argued. Which was itself significant. The question wasn't whether the horizon was that short. The question was what you'd build while the oil was still paying for the country, and where. Libyans understood that their entire economy was built on a market that would not support them another generation.

Two and a half years later, that question is harder to answer, not easier. How do you transition away from a petroleum-based economy in a way that is economically and ecologically sustainable, when the old anchors are all moving at once? The Strait of Hormuz has been closed since March 4, and no one, not even the (rigged) prediction markets, can give you a reliable answer on return to normalcy, or whatever normalcy means these days. Libya is quietly hitting the highest crude production it's seen in more than a decade, even as it invests in solar to run the production fields and caps rather than flares natural gas as another revenue stream. The full picture of what Libya's fuel economy actually runs on, including refined imports from Gulf refineries that no longer ship, and a documented Russian sanctions-evasion operation routing fuel through Libya's southern borders, is finally making it into public reporting.

The solar pivot is still the right answer. It now has to happen inside a much messier, more chaotic room.

The conversation that line forced

Fuel swaps were the stopgap. Libya had crude, couldn't refine enough of it domestically, and traded for finished products through counterparties whose terms moved with geopolitics. The Audit Bureau ordered the program ended in 2023 and it was officially discontinued in March 2025. It worked, sort of, while it lasted. It also locked the country into a model where margin was leaving every transaction.

Refining infrastructure was the traditional alternative. Build your own, capture the margin, reduce import dependency. Classical economics of an oil state. But if oil had twenty years tops, a refinery depreciating over forty was a stranded asset on its first day of operation. The math didn't hold. Pin. Drop.

That left solar. Solar, in Libya, has a specific geography.

Southern Libya is where the sun is. It's also where the country isn't

Southern Libya records global horizontal irradiation of 2,100-2,500 kWh/m², with the highest readings in Al-Kufrah, Marzuq, and Ghat. That puts southern Libya among the best solar resource in MENA, which is itself among the best regions globally. If Libya is going to pivot off oil before the oil pivots off it, the south is where the transition physically has to happen. That's not a preference. That's latitude, cloud cover, and ground suitability.

It's also where the Libyan state has the least reach.

Southern Libya is underserved in the technical sense. Fewer clinics per capita, thinner infrastructure, weaker extension, almost no formal credit. It's also underserved in the political sense. Tripoli's writ fades with distance. The south has been a militia geography since the 2011 collapse and an unresolved Tuareg geography since long before that.

The Tuareg Militias of Ghat control Ghat, Ubari, Murzuq, and the Issine border crossing with Algeria. A stateless-citizenship crisis affects tens of thousands of Tuareg who were born in Libya but have never obtained official state recognition. Without IDs, they are locked out of formal education and employment, and the informal economy and militia auxiliaries absorb the youth the state won't recognize. Anger is mounting. Calls for mobilization are surfacing on social media. That is not a population that an energy project built by a Tripoli state contractor can simply ignore.

AQIM operates across the corridor, though its ability to penetrate the social fabric is constrained by the Toubou and Tuareg militias who run their own ground in the south. The south is not an AQIM sanctuary in the way northern and central Mali have become. It's an AQIM operational environment bounded by local armed actors who have their own reasons to push back.

And the Russian Africa Corps, formally Wagner's successor since December 2023 under Deputy Defense Minister Yunus-bek Yevkurov and fully subordinate to Russia's Ministry of Defense, has been building presence in LNA-controlled territory and pushing deeper south. Libya's value as a Russian logistics hub jumped sharply after Assad fell and Russia lost its Syrian bases in late 2024. This is the geography any Libyan solar build-out has to cross.

The coastal pivot is happening. The southern pivot isn't.

Since that Tunis meeting, the solar pivot has started, but almost entirely coastal.

A $1 billion World Bank loan supports Libya's solar infrastructure. TotalEnergies is building a 500 MW facility at Al-Sadada, expected online in 2026. PowerChina and EDF are developing a 1,500 MW plant in eastern Libya. AG Energy and Alpha Dhabi Holding have agreements for over 2 GW in combined capacity. Libya's National Strategy for Renewable Energies 2023-2035 targets 17% renewables by end of 2025 and 22-25% by 2030. Germany's GIZ is running a 'solar resource assessment' that includes the south (because who doesn't need yet another study). UNDP is 'building Libyan technical capacity'.

Almost none of the developer money is pooling in the deep south. The TotalEnergies project is coastal. PowerChina/EDF is in eastern, Haftar-adjacent territory. The Alpha Dhabi and AG Energy deals are coastal or near-coastal. The best radiation is going undeveloped precisely because the political and security conditions that would make a Murzuq-scale project viable are not there yet.

Concessional capital can bring in panels. It cannot manufacture sovereignty in a region where the Africa Corps, AQIM, a fractured Tuareg political reality, creeping Chinese investment, and the Haftar-Russian fuel pipeline are each running their own operations.

The competing capital story is also worth naming. Libya's refining-expansion plans (Zawiya upgrade, the Ubari refinery, the NOC 660,000 bpd target) need billions in investment. So do the coastal solar projects. In a war-premium environment, both are suddenly more attractive and more expensive. The political economy does not necessarily choose between them. It chooses what's easiest to finance and fastest to commission, which is coastal solar plus refining expansion that fits existing oil infrastructure. The south loses both rounds.

The refining gap Libya still has

Solar, even if investments can overcome the staggering geopolitical hurdles, cannot supply Libya's energy demands overnight. It still needs refined fuel products and the refining problem didn't go away when fuel swaps ended. What it did was get more visible, and, with the IMF's mic drop moment, more complex to solve.

Libya's five refineries (Ras Lanuf, Zawiya, Tobruk, and smaller facilities) have a combined nameplate capacity of about 380,000 barrels per day. Actual production runs closer to 180,000 bpd. Less than half of name-plated capacity, in a country producing 1.43 million barrels of crude per day as of April 2026 and targeting 1.6 mbpd by end of year and 2 mbpd by 2028-2030. Libya exports crude and imports finished product. A lot of that finished product was coming from Gulf refineries, routed through the very shipping lanes that just closed.

NOC has announced plans to nearly double refining capacity to 660,000 bpd, and a new 30,000-bpd facility is in construction in Ubari in the deep south under Zallaf, an NOC subsidiary. The Strait's closure means the refining-expansion argument has won a policy battle the twenty-year line should have closed.

This is not just a Libyan story. The Hormuz closure is stranding more than 4 mb/d of export-oriented Gulf refining capacity globally, with Gulf producers having exported roughly 3.3 mb/d of refined products plus 1.5 mb/d of LPG in 2025. Libya is one of the importers that now has to find that gasoline, diesel, and LPG somewhere else, at war-premium prices, in a market where everyone is looking for the same barrels.

The Russian smuggling nexus the war didn't create

Here is where the story gets uglier, and where anyone trying to have a serious energy transition conversation in Libya has to look before they look at solar.

In November 2025, The Sentry published "Inside Job," documenting that Libya's own leaders were directly behind a $5-6.7 billion annual fuel-smuggling operation from 2022 to 2024. Foreign Policy's coverage named the mechanism clearly. The Haftar coalition diverts subsidized diesel, gasoline, and jet fuel to Russian military personnel based at several Libyan air bases, who then ship it out to Russian missions across sub-Saharan Africa. Other flows cross Libya's porous southern borders into Sudan, where analysts say the fuel supplies the Rapid Support Forces militia. I should mention at this point that Haftar holds dual Libyan-American citizenship. He defected from Gaddafi in 1987 and spent about twenty years in Northern Virginia, naturalizing and working closely with the CIA from a home a short drive from their Langley headquarters. He holds multiple Virginia properties including a condo in Falls Church, an 85-acre estate in Keysville, and a home in Vienna, with more than $8 million in Virginia real-estate investment since 2014. The eastern coalition leader whose forces are the core of the sanctions-evasion pipeline is a US citizen. The US court system has tried, and as of April 2024 failed on jurisdiction grounds, to hold him civilly liable for war-crimes claims brought by Libyan-American plaintiffs.

The International Consortium of Investigative Journalists ran the "Russia's ghost ships haunt Libya" investigation in March 2025. It documents a Mediterranean "dark fleet" of aging tankers, operating out of Benghazi and Tobruk, turning off AIS transponders and executing ship-to-ship transfers at sea to obscure the origin of Russian fuel. At least one in three litres of smuggled diesel in the Mediterranean is estimated to be Russian. The Italian Guardia di Finanza intercepted one ship, the Aristo, mid-transfer of 670,000 litres of diesel to a vessel called Normand Maximus.

Russian fuel exports to Libya fell from roughly 56,000 bpd in 2024-2025 to around 5,000 bpd in early 2026, as Western traders moved in and Libya began trying to reduce exposure. That is good news to the degree it happened. It is not structural reform. The Haftar-Russian base logistics are still operating. The southern border is still porous. And Russia treats Libya as a strategic logistics hub in Africa in ways that became more important after Russia lost its Syrian bases in late 2024.

The UN Security Council renewed the Libya sanctions regime through May 2026 and created new designations specifically for actors in the illicit trade in Libyan petroleum products. That is the official recognition that Libya's fuel economy is entangled in a sanctions-evasion operation at a scale that matters to global markets, not just to Libya.

This is the fuel infrastructure that an energy transition has to be built on top of, or around.

The Sharara attack and the Arkenu collapse

Two events in March 2026 compressed the picture.

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 recovered Russian-made munitions at the scene, including an M-62 aerial bomb and 130mm rocket fragments. Sharara produces roughly a million barrels per day when fully operational. A disruption of that scale in the middle of a Hormuz crisis matters to global prices and to Libya's fiscal position at once.

Separately, Tripoli terminated the Arkenu agreement, the arrangement that had been quietly holding Libya's oil revenue flows together, citing corruption and diversion of oil revenues away from the Central Bank of Libya. The Middle East Institute's read is blunt: "the arrangement keeping Libya's oil flowing has collapsed and nothing credible has been agreed to replace it."

So as of mid-April 2026, Libya is simultaneously:

  • Producing at a decade-high crude level in a war-premium market
  • Missing the refined imports it historically drew from Gulf refineries
  • Running out of the Russian smuggled fuel that was quietly covering part of the gap
  • Operating without the Arkenu arrangement that had routed revenue
  • Dealing with a Russian-munitions sabotage event on its biggest southern oilfield

This is the political and infrastructural context any solar transition has to be built inside. Complex, corruptible, opaque. With the dismantling of USAID in 2025, without programs like Enhanced Partnerships for Institutional Capacity (EPIC) (I remain extremely proud of making that acronym work) to work with the ministries, or Taqarib and LEAP to work in the south with those fragile populations, the uphill battle is on an ever-steepening slope.

What's left after USAID's dismantlement

I was in those 2024 meetings as part of the $70M USAID portfolio I managed in Libya, a fragile-state program whose operational reality was that security situations and currency controls could shift in a week. We were getting buy-in from ministries to pay for their own capacity building. We supplied the knowledge, they supplied everything else. I was very proud of EPIC and its structure. We were changing the narrative, albeit slowly, but with I believe genuine interest from the Libyan authorities. We had the knowledge and expertise that they wanted, and they were willing to at least try to meet us halfway. That portfolio doesn't exist anymore. Neither does the bilateral architecture that would have been the US contribution to whatever Libya's energy transition looks like. The Administration dismantled it in 2025 on a weekend woodchipper bender.

What survives commercially: oil exports, very profitably for the moment. What survives in the technical and policy-advisory space: the standard development banks and a handful of foundations. The developer money is there, mostly European and Emirati, for coastal solar, despite the high risk of east-west clashes rendering investments unreliable. The sanctions architecture is there, through UN designations and European traders pushing Russian flows out, though the chaos in the surrounding waters isn't helping.

What doesn't survive: the piece that made the conversation in the room possible in the first place. A trusted USAID-equivalent facilitator who could sit with Libyan energy planners, IMF technical staff, European donors, sanctions enforcement officials, and southern political actors, translate between the policy logic and the operational reality of Ubari or Ghat, and make discussions like the one I was in actually produce next steps that reach the south and engage the smuggling nexus, rather than stopping at the coast and pretending the Haftar-Russian logistics aren't there.

That's the craft that got dismantled. The need for it didn't go away, and the war just raised its cost by roughly an order of magnitude.

The harder question for whoever's left

Libya's solar pivot at the coastal level is a technically tractable problem. It's happening. What's not happening at any scale is the deep-south build-out, which is where the radiation is genuinely world-class and where the transition would actually deliver on the twenty-year line. Programs like LEAP, when they were running, supported farmers investing in solar-powered water pumps to replace diesel generators, and they were training the next generation of solar panel technicians for when Libya's harsh environment inevitably weakened the panels. All of that is gone now.

We've also lost credible engagement with the fuel-economy corruption nexus that the war just exposed. There needs to be someone willing and able to convene a conversation with Libyan energy planners, the Haftar coalition, European sanctions officials, the Central Bank, the Tuareg political authorities in Ghat and Ubari, and eventually the Africa Corps counterparts who will notice whatever gets built, and translate across those rooms without pretending any of the actors is cleaner than it is. Someone who can be considered a transparent, honest broker. Someone like the highly-respected technical experts USAID brought in to do just that.

There is no longer any bilateral agency positioned for that on the US side. The question is whether an international coalition, anchored by the IMF or WB or UN but including AfDB, EIB, and Islamic Development Bank, with European and Emirati backing, can do that work with Libyan ownership, with the realism to name the security and governance conditions the southern projects will require, with the vision to see the longer roadmap, and with the right mix of patience and pushing to do it before the war-premium window closes.

The twenty-year line still stands. Arguably less now, given the war and the refining gap that just became acute. Countries are slowly, belatedly, and without the kind of planning I could wish they had, realizing that fossil fuel dependency is a greater risk to their own sovereignty and survival than WMD, and not only because of the risks that climate change brings to social and economic order. The dependence is pushing towards a global recession, and countries are trying out the four day work week and remote learning to cut fuel use. Those are developed countries who have fuel stocks, who can trade easily on the world market without sanctions. Imagine the Libyan situation.

The question now is whether, with their own economies and energy transitions to think of, the countries positioned to support Libya's transition still have the architecture to do it, or whether another fragile-state energy transition happens to Libya rather than with Libya, while the Haftar-Russian fuel pipeline quietly keeps running underneath.

What are you seeing in fragile-state energy transitions right now? Where is the political economy permitting an actual pivot, versus where is concessional capital pretending the security and governance context is something it isn't? I'm especially curious whether anyone is working the southern Libya corner of this, or the sanctions-compliance corner, or both, or if the pivot conversation is still happening entirely at the coastal and Tripoli levels with everything else bracketed off.