Libya Could Fill Global Oil Gap As Iran Conflict Continues To Rage – Analysis

Map of Libya’s largest oil and natural gas fields. Credit: EIA

April 15, 2026 
By James Durso

A defining pillar of President Trump’s America First agenda has been national energy security. Paired with the diplomatic momentum of the Abraham Accords, that strategy has reshaped regional alliances, strengthened U.S. partnerships and reinforced economic stability at home.

Today, both pillars are under strain. The widening war with Iran has triggered one of the most severe energy shocks in decades. Oil prices have surged above $115 per barrel as markets react to escalating tensions and the risk of prolonged disruption.

At the center of the crisis is the Strait of Hormuz, a chokepoint through which roughly one-fifth of global oil supply flows. With shipping constrained, the effects are cascading across the global economy, raising fuel costs, fueling inflation, and increasing the risk of economic slowdown in the U.S. and among its allies.

Washington has responded with extraordinary measures. As of March, the U.S. had released approximately 172 million barrels from the Strategic Petroleum Reserve as part of a coordinated 400-million-barrel drawdown with members of the International Energy Agency. Although this has helped blunt immediate price spikes, it has depressed U.S. reserves to roughly 243 million barrels — the lowest level since the early 1980s.

At the same time, policymakers have cautiously adjusted sanctions policy to stabilize supply. While maintaining core restrictions on major Russian energy firms such as Lukoil and Rosneft, the U.S. has temporarily eased certain measures. A 30-day waiver for stranded Russian and Iranianoil cargoes and a more flexible approach to shipments involving Cubareflect a pragmatic effort to ease market pressure amid the Hormuz disruption.

These steps underscore the urgency of the moment, but also their limits. Strategic reserves are finite, and sanctions flexibility carries geopolitical trade-offs. Together, they buy time, but they do not address the underlying constraint: insufficient global supply and supply chain instability.

While Trump looks for options to stabilize markets in a durable way, a more strategic opportunity is right in front of him: Libya.

Libya holds more than 48 billion barrels of proven oil reserves, the largest in Africa. It also produces precisely the kind of light, sweet crude most sought after by European refiners.

Before years of instability caused by the NATO attack on the Gadhafi regime, Libya generated roughly 1.6 million barrels per day. With political stability and renewed investment, production could exceed 2 million barrels per day, providing a meaningful buffer against Gulf disruptions.

In today’s market, that incremental supply matters. Energy markets are driven as much by expectations as by actual output. The credible prospect of increased Libyan production could restore confidence, reduce volatility, and place downward pressure on global energy prices.

The challenge is governance, not geology.

Since the fall of Moammar Gadhafi in 2011, following NATO’s intervention led by the Obama administration, Libya has remained fragmented. Rival governments and militia control over infrastructure have repeatedly disrupted production and deterred investment.

That failure now presents a unique and important opportunity for Trump.

A durable political settlement in Libya would unlock suppressed production, attract investment and provide Europe with a reliable, proximate alternative to Middle Eastern supply routes. At a moment when the Strait of Hormuz remains a chokepoint, Libya offers a Mediterranean corridor largely insulated from Gulf volatility.

The benefits extend beyond energy. Libya’s instability has created space for extremist organizations to operate, including ISIS and al-Qaeda. Stabilization would strengthen counterterrorism coordination with the U.S. and Europe and enhance regional security. It would also counter growing influence from China and Russia, both of which are expanding their presence across Africa’s energy sector. Libya, given its reserves and location, is a strategic prize.

For Trump, Libya offers a rare convergence of opportunity and feasibility. Unlike Iran, it is not an entrenched adversary. Unlike Venezuela, it is not defined by ideological opposition to U.S. engagement. Instead, it is a fragmented state whose competing factions share a common incentive: restoring oil production and revenue.

That shared interest creates the foundation for a pragmatic diplomatic breakthrough. Emergency reserve releases and temporary sanctions relief are stopgap measures. A successful diplomatic initiative in Libya would expand global supply, reduce long-term price volatility, and deliver a clear geopolitical win.

At a moment of historic disruption driven by the Iran conflict, Libya is not simply another foreign policy challenge. It is a strategic solution hiding in plain sight. 

This article was published at The Hill

James Durso

James Durso (@james_durso) is a regular commentator on foreign policy and national security matters. Mr. Durso served in the U.S. Navy for 20 years and has worked in Kuwait, Saudi Arabia, Iraq, and Central Asia.