{"id":66,"date":"2026-05-13T13:36:13","date_gmt":"2026-05-13T13:36:13","guid":{"rendered":"https:\/\/housingnewsamerica.com\/?p=66"},"modified":"2026-05-13T13:36:13","modified_gmt":"2026-05-13T13:36:13","slug":"libyas-false-peace","status":"publish","type":"post","link":"https:\/\/housingnewsamerica.com\/?p=66","title":{"rendered":"Libya\u2019s False Peace"},"content":{"rendered":"
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For decades, U.S. involvement in Libya has oscillated between neglect and fleeting moments of attention and resolve. But so far, the second Trump administration has displayed a surprising degree of interest in the oil-rich country. It appears to want to end the long-standing stalemate between Libya\u2019s two ruling factions\u2014the UN-recognized government of Prime Minister Abdulhamid Dabaiba in the west in Tripoli and the domain of Field Marshal Khalifa Haftar, based in the eastern city of Benghazi.<\/p>\n

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In the past year, this push has been spearheaded by Massad Boulos, U.S. President Donald Trump\u2019s senior adviser for Arab and African affairs. After rounds of shuttle diplomacy, Boulos announced an apparent breakthrough earlier this month: the two rival governments had agreed on a unified budget for the first time in years. Boulos hailed the deal on social media as \u201ca milestone for cooperation that offers many benefits for the economy and for Libyans across all regions.\u201d The agreement is certainly a step in the right direction. But Washington should not imagine that what is essentially a financial deal between two dynasties constitutes a major advance toward political unification. The April 11 agreement does not address the deeper drivers of Libya\u2019s crisis and raises the risk of renewed destabilization.<\/p>\n

Although Libya has not seen major armed hostilities since 2020\u2014when a nearly two-year-long civil war sparked by Haftar\u2019s attack on the Tripoli government came to an end\u2014the continued extraction of state resources for personal gain by both ruling factions has left Libya in a profound fiscal crisis and without a unified executive. Successive efforts to deal with these challenges have failed. In 2020, the UN launched an initiative aimed at unifying the banking sector, ensuring greater transparency in the oil sector, and encouraging local governance reforms. These measures were supposed to pave the way for a unified government with restructured political institutions and, within a year, national elections. Partly because of halfhearted support from the Biden administration, the elections never materialized, and the UN push fell apart. In 2022, the United Arab Emirates, with U.S. acquiescence, brokered a deal behind closed doors that saw the Dabaiba family install a Haftar-aligned chair at the helm of the National Oil Corporation, Libya\u2019s sole wealth generator. By 2025, that formula had averted further civil war but done little else. Libya was mired in economic crisis and political paralysis.<\/p>\n

A key reason for the failure of the 2022 deal was its transactionalism\u2014the errant belief that Libya\u2019s political gridlock could be broken by appealing to the commercial interests of competing elites rather than by addressing the needs of the Libyan people. But this exact logic underlies the current approach of the Trump administration. Instead of striving for a flashy diplomatic breakthrough and an economic deal with unelected elites, Washington needs to pursue a broader and more inclusive path in Libya. It must support existing UN efforts to bolster the independence of Libya\u2019s financial and administrative institutions and lay the groundwork for national elections. And it must do more to rein in the disruptions caused by Turkey, the single most consequential foreign actor in the country. Only then will the United States truly help prevent Libya from slipping into greater disarray.<\/p>\n

GILDED STATE<\/h3>\n

Libya\u2019s relative peace in recent years is often taken as a sign of stability. This is a dangerously complacent view. Both the Dabaibas and the Haftars have used their financial gains to acquire advanced weapons and bolster their own military coalitions, a development that increases the risk of violent confrontation. While the main factions have grown rich, the division of the country has lowered living standards nationwide, especially in peripheral areas. In the remote south, the Haftars\u2019 focus on illicit revenue over local needs has lately stoked violence.<\/p>\n

The divisions in Libya\u2019s governing structure also make the country susceptible to manipulation by foreign actors, chief among them Turkey. Ankara\u2019s Libya policy has lately been dominated by the pursuit of a maritime deal, originally struck in 2019, that would give Turkey unprecedented regional control and connect it to Libya\u2019s eastern shores. After years of quiet entrenchment in the northwest, Ankara spent much of 2025 courting the Haftar family in the east in an effort to secure parliamentary ratification of the maritime deal\u2014a shift from its traditional alliance with the Dabaibas. Turkey is now an ambitious, revisionist actor in Libya, playing both sides and disturbing Libya\u2019s already fragile power balances.<\/p>\n

After the collapse of the UN-backed election initiative in 2021, the Biden administration retreated from the notion that promoting democracy would stabilize Libya and instead followed the Emirati impulse to cut deals. The July 2022 appointment of a Haftar loyalist at the helm of the National Oil Corporation encouraged Libya\u2019s leaders to further interfere in the economy. Both factions and their associates scrambled to claim piecemeal ownership of state revenues, exert influence over the central bank, and spend public funds on infrastructure at their own discretion. Some of these expenditures have addressed genuine needs, but a huge amount of money has been devoted to prestige construction projects\u2014stadiums and luxury hotels, for instance\u2014designed to generate contracts for cronies and not to serve the population.\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b<\/p>\n

The Trump administration\u2019s Libya policy is plagued by contradictions.<\/span><\/p><\/blockquote>\n

The Haftars possess certain advantages over the Dabaibas. Their territory is markedly bigger, encompassing Libya\u2019s major oil fields and export terminals. The scale of the Haftar domain leads foreign governments, such as the United Arab Emirates, to try to woo the potentate in Benghazi without exerting any pressure for reform.<\/p>\n

The blurry power-sharing arrangements that were intended to stabilize Libya\u2019s institutions have only accelerated their erosion, as was evident with the central bank in the summer of 2024. The Dabaibas, reacting to the ever-growing tilt of the National Oil Corporation toward the Haftars, forced out the central bank\u2019s governor in the hopes of installing a loyalist. The Haftars responded by imposing an oil blockade, shutting down most of the country\u2019s routine exports for more than six weeks and costing Libya nearly $3 billion. The international community refrained from condemning the action, effectively signaling that the Haftars could repeat such coercion with impunity in the future, no matter the costs to ordinary Libyans. The bank governor installed at the close of that crisis, Naji Issa, now faces relentless political pressure from both sides to disburse fundsfor projects of varying legitimacy. The result is that Libya\u2019s annual hard-currency deficit was roughly $9 billion last year, and the dinar suffered its steepest sustained depreciation in years, driving a painful surge in consumer prices across the country.<\/p>\n

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There is also a multibillion-dollar gap between the value of the crude oil the National Oil Corporation extracted in 2025 and the amount it deposited with the central bank. This is largely because both ruling factions are diverting hydrocarbon wealth to their own coffers from the state treasury. The 2022 power-sharing arrangement has yielded no discernible benefit for ordinary Libyans. Nor has it advanced U.S. or broader Western interests in the country. As Libya\u2019s institutions have continued to weaken, Western firms have found it more difficult to operate in the country since they now face greater unpredictability and opacity. Large U.S. companies struggle to function in such conditions. Any windfall Libya sees as a result of Iran war\u2013related spikes in crude oil prices will merely obscure the dysfunctional mechanisms responsible for these fiscal problems. In fact, greater oil revenues this year will only encourage both the Dabaibas and the Haftars to indulge in further abuses of the current system.\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b<\/p>\n

DEALS GONE BAD<\/h3>\n

The Trump administration\u2019s Libya policy is plagued by contradictions. Its insistence on reconciling the two ruling families as a precondition for any unified governance structure suggests that the Dabaiba and Haftar clans are expected to remain in power for the foreseeable future. But in his February 18 remarks at the UN, Boulos explained that Washington\u2019s goal is to \u201ccreate the conditions for a democratically elected government to be able to lead Libya\u201d\u2014an outcome that would require at least some of the incumbent leaders to step down.<\/p>\n

Washington\u2019s focus on elite bargains and economic statecraft first became clear last summer, when Boulos visited both Tripoli and Benghazi. The ruling family in each city pledged grandiose business opportunities to the U.S. adviser, including tens of billions of dollars in contracts for American firms. In September 2025 and January 2026, Boulos convened further meetings with Libyan leaders in Rome and Paris. He mediated not between broad political constituencies but rather between representatives of the two families: Ibrahim Dabaiba, the prime minister\u2019s influential nephew, and Saddam Haftar, one of the field marshal\u2019s sons and his presumptive heir. Marketed as a signature Trump administration peace initiative, this format merely imitated the Biden-backed, Emirati-brokered arrangement from 2022.<\/p>\n

The Trump administration argues that its diplomacy will help U.S. firms secure business opportunities, yet it overlooks the inherent instability that comes in a country where political power is so yoked to a handful of influential leaders. To be sure, major U.S. oil companies are expanding their operations in Libya. After years of absence, ExxonMobil is set to survey four offshore blocks. Chevron won an onshore block in the Sirte basin and signed a separate offshore survey agreement. ConocoPhillips has renewed and expanded its existing license for the Waha oil field through 2050, and SLB (Schlumberger) is increasing its well-services role. But once committed, these firms will have no institutional framework to fall back on when the officials who welcomed them prove unreliable.<\/p>\n

The White House\u2019s flawed approach also extends to its engagement with Libya\u2019s fragmented military. Washington worked hard to convince military leaders from both eastern and western Libya to participate together in April\u2019s Flintlock military exercises. But securing that joint participation came at a cost. For months, Washington refrained from exerting serious pressure on either faction lest one side pull out of the exercises, issuing no public criticism about corrupt practices and instituting no sanctions against midlevel figures. The tradeoff might have been worthwhile had the exercises produced genuine military unification, but no serious integration of rival Libyan forces is yet underway.\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b<\/p>\n

BACK TO THE FUTURE<\/h3>\n

Securing the Trump administration\u2019s commercial objectives in Libya requires a level of institutional stability that personalized dealmaking cannot provide. To that end, Washington needs to broaden the scope of its engagement with Libya and with the foreign states that wield influence in the country\u2014primarily Turkey. The United States should prioritize Libya\u2019s fiscal viability by helping rebuild the independence of its two key economic pillars\u2014the central bank and the National Oil Corporation. It should also support accountability and transparency through independent, public audits and third-party revenue monitoring, opposing the sort of politically motivated interference that produced the 2022 National Oil Corporation debacle and the 2024 central bank crisis. And any meaningful U.S. effort to stabilize Libya will require comprehensive coordination with Turkey\u2014and, when divergences prove irreconcilable, a willingness to apply pressure on Ankara. Washington must move beyond seeking intermittent Turkish buy-in and instead commit to granular, sustained engagement that uses both diplomatic coordination and forceful pressure to check Ankara\u2019s unilateral activism.<\/p>\n

More broadly, the United States must also support the imperative of national elections for a unified executive. Here, it has a ready platform to promote: the UN\u2019s new road map for Libya, which calls for broad consultations with Libyans to address economic and political grievances, unify the country\u2019s parallel administrations, and, crucially, hold elections. The UN\u2019s plan also endeavors to incorporate municipal councils, grassroots civil society organizations, and political parties into the country\u2019s technocratic institutions, an approach that should receive more backing from the United States. Trump\u2019s evisceration of the U.S. Agency for International Development, which had previously been supporting both local and national institutions in Libya, has not helped matters. But for Washington to truly open Libya for steady U.S. business, it must recognize that conditions for long-term investment will never be propitious as long as U.S. officials focus only on pandering to the ambitions of the country\u2019s dueling potentates.<\/p>\n

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