Libya: Trapped Between Internal Impasse and International Interference

On April 11, 2026, Libya’s two rival governments approved the country’s first unified national budget since 2013, valued at nearly 190 billion Libyan dinars (approximately $30 billion). The agreement, sponsored by the United States through its envoy and Presidential Advisor for Arab and African Affairs Massad Boulos, was primarily a pact between Ibrahim Dbeibah, nephew of Tripoli-based Government of National Unity (GNU) Prime Minister Abdul-Hamid Dbeibah, and Saddam Haftar, son and presumed successor of the head of the eastern-based Libyan Arab Armed Forces (LAAF), Khalifa Haftar. Ten countries, including Egypt, France, Italy, Qatar, Saudi Arabia, Türkiye, the United Arab Emirates, the United Kingdom, Germany, and the United States, welcomed the agreement as a key step towards economic coordination between eastern and western Libya. 

This coincided with the joint military exercises between eastern and western forces in the central city of Sirte, as part of the U.S. Africa Command’s Exercise Flintlock. It also came as American energy companies made significant steps to rebuild their presence in the country: Chevron won an exploration license in the Sirte Basin, while ExxonMobil signed a memorandum of understanding with the National Oil Corporation (NOC). Yet, interpreting the unified national budget agreement as a political breakthrough would lack perspective. It came as the latest report by the United Nations Security Council’s Panel of Experts documented an unprecedented level of control by armed groups over state institutions, alongside fuel and arms smuggling networks that feed off Libya’s ongoing divisions. 

The situation in Libya is being rearranged through multiple simultaneous tracks: the UN; renewed U.S. diplomacy; and regional and international actors, each with their own calculations and priorities in the country. This highlights the fundamental tension in Libya’s contemporary landscape, and poses the question at the heart of this situation assessment: Is the country moving toward a sustainable institutional settlement that rebuilds the state on constitutional and legal foundations, or toward top-down, bilateral arrangements that reproduce the crisis in new forms and indefinitely postpone a fundamental solution?  

Crisis of Governance  

Libya’s current predicament cannot be understood in isolation from its deep-rooted crisis of governance, which is at the root of all its secondary crises. Libya’s predicament, despite its military, political, and regional aspects, is fundamentally that of a state not completed, of institutions not established, and of a socio-political contract that has yet to be agreed, even 14 years after the fall of the Gaddafi regime. 

This crisis manifests itself in intertwined ways. First is the division of executive power, since 2014, between two rival governments, each relying on partial legitimacy and the control of a portion of Libyan territory and resources. Second is the division of sovereign institutions that should sit above such disputes, such as the Central Bank, the NOC, and the judiciary, which have thus transformed into arenas for power struggles. The UN Panel of Experts observed that armed groups have achieved an unprecedented level of influence over state institutions in both the west and the east. 

The third manifestation of the crisis is the parallel economy of arms and smuggling, which has effectively replaced the formal economy in many areas. The UN has identified networks that, since March 2022, have exported some 450,000 tons of diesel from Benghazi’s old harbor, in 185 illicit operations. This came alongside the export of $460 million-worth of crude oil by Libya’s first private oil company since May 2024. Fourth is the erosion of the concept of equal citizenship in favor of regional, tribal, and local loyalties, meaning that any inclusive national project inevitably clashes with narrower, more deeply entrenched allegiances in Libya’s day-to-day reality. In this context, international reports do less to reveal new information than to document known facts.  

Washington’s Re-Engagement 

American diplomacy has paid noticeably more attention to Libya in recent months, after years of relative disengagement. Boulos stepped up his involvement in July 2025, applying the “economy-first” approach that Washington has adopted toward resource-rich countries elsewhere, through rounds of mediation in Rome (in September 2025) and Paris (in January 2026). However, it was striking that he invited to the talks representatives of the two most powerful families — the Dbeibahs in the west and the Haftars in the east — empowering a new generation of scions rather than pushing for broader political representation.  

While the budget agreement is a step in the right direction, prominent analysts view it as more of a financial deal between two families than a step toward genuine political unification, essentially replicating an arrangement brokered by the UAE with the U.S. support in 2022, which saw the Dbeibah family install a Haftar-aligned chair at the helm of the NOC. There are growing concerns that surging oil revenues, which according to the NOC, jumped from some $1 billion in the month of February to $2.9 billion in April as global crude prices spiked, could be squandered or diverted through patronage networks, instead of being spent on public services or on repaying Libya’s debts. The U.S. approach also faces structural challenges: the unification of Libya’s governing institutions cannot be achieved through external decisions; top-down arrangements are prone to collapse at the first serious test; and the calculations of other actors may not necessarily align with Washington’s vision. 

The UN: Expectations vs. Implementation 

The United Nations Support Mission in Libya (UNSMIL) occupies a central position in any international approach to Libya, as it provides the overarching legitimate framework for mediation. In August 2025, the UN SecretaryGeneral’s Special Representative Hanna   Tetteh launched a roadmap based on three pillars: the adoption of a viable electoral framework, the unification of Libya’s institutions under a new government, and the launch of a structured dialogue covering governance, the economy, security, and reconciliation. This dialogue started in Tripoli on December 14, 2025, with 124 prominent Libyans present, and was scheduled to conclude in early June 2026. 

However, the political process has continued to stall over a persistent, fundamental obstacle. In April, Tetteh informed the Security Council that progress had been inadequate, warning that continuing with “business as usual” could perpetuate the status quo and pose serious risks both to Libya and the region, particularly given that certain actors continue to operate through parallel structures, undermining institutional reunification. The impasse stems from the failure of the House of Representatives and the State Council to complete the first two steps of the roadmap: reconstituting the High National Elections Commission and agreeing on a constitutional and legal framework for elections. 

Conversely, Libyans themselves have not always agreed over the role of UNSMIL itself. The High Council of State has expressed dissatisfaction with what it sees as the mission’s overreach in its dealings with Libya’s legislative institutions. These reservations relate not to the UN’s role as such, but rather to its implementation and limits. The mission needs to build trust through transparency and prior coordination, thereby safeguarding the principle of national ownership of the political process. If it disregards these principles, the mediator risks turning from a tool for resolution into a party to the conflict. 

Pragmatism vs. Procedure in Libya’s Institutions 

Libya’s situation reflects a fundamental dilemma facing transitional phases in countries emerging from conflict: how to balance the demands of procedural legitimacy with the imperatives of stability during such a sensitive period. The institutional approach is based on the premise that any settlement must be grounded in legitimate institutions and constitutional frameworks, and that lasting settlements cannot be built on stand-alone, bilateral arrangements. In Libya’s case, a 20-member expert advisory committee formed by UNSMIL stressed in a report last year that legislative reform alone is insufficient, and that the country needed a comprehensive political settlement based on a national consensus, along with restrictions on the long-term commitments the transitional government is mandated to make. 

By contrast, pragmatic approaches respond to the need to break the deadlock through interim arrangements, even if they originate outside traditional frameworks. However, such arrangements risk producing parallel forms of legitimacy that erode at the first test, thus perpetuating the logic of “top-down arrangements” that has consistently sent the Libyan crisis back to square one after every interim solution. The lack of agreement between the HoR and the State Council over an electoral law remains a major complicating factor, pushing some international actors to seek alternative paths outside established institutional frameworks. 

International Interventions  

Libya’s trajectory has repercussions that extend far beyond the country’s borders. Washington is seeking to recalibrate its influence in the Mediterranean and North Africa, opening the door for its companies in the oil and infrastructure sectors. The European Union is focused on issues around migration and energy. Libya’s regional neighbors view it as a space for strategic depth or an arena for competition. Meanwhile, the decline of Russia’s presence is seen as an opportunity to reshape the balance of power. This scramble has turned Libya into a battleground for competing interests rather than a stage for a potential, genuine settlement, which means that any national process faces multifaceted pressures. 

In this context, there are growing calls for respect for the will of the Libyan people, who must take precedence in determining their own political future, with an emphasis on the need for any lasting political arrangement to emerge from a genuine national consensus that strengthens legitimate institutions and enshrines the principle of democratic accountability. These calls are not a rejection of the international community’s role per se, but rather a demand for it to be redefined within limits that serve the efforts for a solution rather than complicating it, and which empower Libyans to own their path instead of having it imposed upon them. 

The Question of Refugees and Migrants 

The issue of migration is key to Libya’s stability. Therefore, linking any political settlement to the protection of civilians and migrants, and ensuring access to aid, is fundamental to its sustainability, not an additional luxury. Clashes in Tripoli in May 2025 revealed the fragility of the situation, resulting in civilian casualties and destruction in densely populated residential areas, and directly impacting migrant communities. 

According to the Displacement Tracking Matrix of the International Organization for Migration (IOM), the number of migrants in Libya reached around 936,134 by early 2026, primarily from Sudan, Niger, Egypt, Chad, and Nigeria, and concentrated in Tripoli, Benghazi, and Misrata. The UN’s Office for the Coordination of Humanitarian Affairs (OCHA) estimates that 787,090 people were in need of humanitarian assistance as of May 2025. While the number of internally displaced Libyans decreased from approximately 316,000 at the height of the fighting in 2019–2020 to around 30,000 by early 2025, some 88,000 refugees and asylum seekers are registered with UNHCR. Two-thirds are Sudanese; all face the absence of a national asylum system, arbitrary detention, and the risks of trafficking and exploitation. Meanwhile, the (IOM)’s Voluntary Humanitarian Return program has reached 100,000 returnees since its launch in 2015, highlighting the critical need for safe and orderly pathways to protection. 

Assessing Risks and Potential Paths Forward 

The current situation suggests three distinct scenarios for the coming three to six months in Libya: 

• Budget Deal Underpins Superficial Stability: The budget and resource-sharing deal between the two families holds, but without addressing the root causes of the crisis, resulting in a short-term lull coupled with entrenched division and the squandering of an oil revenue glut. 

• Renewed Violence in the West: Power struggles erupt between militias in Tripoli, similar to those of May 2025, especially with attempts to redraw the map of security control, threatening civilians and undermining any economic gains. 

• Institutional Breakthrough via the UN Track: The results of the structured dialogue, along with an agreement between the HoR and the State Council on the electoral commission and a legal framework for polls, lead to a genuine electoral process. This would be the slowest and most complex path, but also the most sustainable. 

These scenarios intersect with several potential risk factors: the impact of the U.S.-Israeli-Iranian war on oil prices and spending incentives; the continued operation of diesel and arms smuggling networks; competition among external actors; and the stalemate over elections remaining unresolved. The longer the structural crises are left unaddressed, the higher the cost of a future solution and Libya’s divisions will only deepen.

Towards a Consensual Institutional Approach   

Libya finds itself at a crossroads between two options, divergent in philosophy and outcomes: the path of top-down arrangements, which can produce superficial, short-term stability but leave the underlying structure of the crisis untouched, and the path of consensual institutional building, which capitalizes on the current moment to re-establish the political process on clear constitutional foundations. Success requires an integrated approach that combines the reunification of sovereign institutions, the building of national consensus on the electoral and constitutional framework, limiting the role of international actors to support rather than interference, and restoring the credibility of good governance. Libya remains a country with the potential for recovery, but the window of opportunity will not remain open indefinitely. The present moment may be the last real chance before the crisis transforms into a chronic reality from which it will be difficult to escape.