US Unveils Plan to Unify Libyan Institutions Through Oil Investment

The United States has launched a bold initiative to unify Libya's fractured state institutions, leveraging the country's vast oil wealth as the primary incentive for reconciliation. In an exclusive interview with the Financial Times, Masad Boulos, President Donald Trump's senior adviser for Arab and African affairs, outlined a strategy pairing political power-sharing with a major push to attract American oil investment — potentially doubling Libya's output to 3 million barrels per day by the end of this decade.

Key Elements of the US Power-Sharing Framework

  • Unified executive council: The plan envisions placing Saddam Haftar, son of eastern military commander Khalifa Haftar, at the head of a new presidential executive council.
  • Dbeibeh retains power: Abdul Hamid Dbeibeh, prime minister of the Tripoli-based Government of National Unity since 2021, would remain in his post, with a relative taking a national security role.
  • Oil majors sign on: ConocoPhillips and Chevron have already signed agreements with Libya in 2026, while Halliburton and SLB prepare expanded investments as Libya launches new exploration licensing rounds after 17 years.
  • Historic unified budget: For the first time in over a decade, Libya's east and west signed a unified national budget in April 2026.

Oil as the Engine of Unity

Libya holds Africa's largest proven oil reserves, yet production has remained far below capacity for years due to sanctions, conflict, and armed groups blockading oil facilities to extract concessions. Boulos stated that Washington has been encouraging US oil majors to invest, arguing that political stability would unlock enormous economic opportunities for Libya and international partners alike.

Elmadani Badi, a Libya risk analyst and co-founder of political risk consultancy Informe, described the approach as reflecting the Trump administration's "hyper-pragmatic" foreign policy style. "The United States believes it knows these stakeholders and is open to making deals with them — so why not create a favorable political environment for more investments?" Badi said.

Why Every Libyan Should Care

The stakes are enormous. If production reaches the projected 3 million barrels per day, the resulting revenue could transform Libya's economy and daily life for its 7 million citizens — funding infrastructure, healthcare, and education that have deteriorated dramatically since 2011. But the risks are real: past power-sharing deals between armed factions have favored elites over ordinary Libyans, and unchecked oil wealth has fueled corruption rather than development.

What makes this moment different is the combination of US diplomatic weight and sheer economic incentive. For Libyans exhausted by over a decade of division, this could be the push that finally breaks the cycle — if leaders choose national interest over personal power.

Deep Skepticism: Can the Plan Actually Work?

Diplomats and analysts express serious doubts. The core problem: zero trust between the two sides and no willingness to make painful concessions.

Claudia Gazzini, a senior analyst at the International Crisis Group currently visiting eastern Libya, was blunt: "This is just wishful thinking. There is no public discourse here in Benghazi about reconciliation with the other side. Everything is based on treating Tripoli as the enemy."

Tim Eaton of London's Chatham House noted the Haftar family has never shown willingness to share power. "The fear in the Dbeibeh camp is that any agreement will be exploited as a platform to seize the rest of the government," he said. Italy, Libya's largest trading partner, has been consulted and expressed support but privately believes implementation will be extremely difficult.

What Comes Next

Recent small steps offer a sliver of hope: the November agreement on development funding for both east and west, the April unified budget, and joint participation in AFRICOM military exercises. Whether Libya's leaders seize this moment will define the country's trajectory for the next decade. The world is watching — and the stakes are too high to look away.

— LibyaPress / Economy Desk