Libya

Libya's 2025 was a tale of strong oil-driven growth resting on fragile political foundations. With production averaging 1.374m bpd — its highest in over a decade — and oil revenue rising 15% to $21.9bn, real GDP surged by an estimated 12-13% and the state ran a fiscal surplus in the first nine months. Inflation stayed low at around 1.6% for the year, though the December print climbed to 2.8% as currency devaluation began to bite. Nominal GDP sits near $45bn.

The investment thesis is a re-opening hydrocarbon sector plus a vast reconstruction backlog. Libya's first licensing round in 17 years put 22 blocks (mostly Sirte basin) on offer with sweetened terms lifting contractor IRR from 2.5% to 35.8%, drawing 30-plus pre-qualified majors — BP, Chevron, ExxonMobil, TotalEnergies, Eni, Shell — with awards due in early 2026. TotalEnergies and Chevron are reported to be pursuing a ~$20bn, 25-year development, Eni has resumed offshore drilling, and BP and Shell have signed study agreements. Alongside the upstream, a reconstruction pipeline spanning highways, ports and power is being channelled through the Libyan Development & Reconstruction Fund.

The defining risk is political fragmentation. Libya remains split between the UN-recognised GNU in Tripoli and the eastern, Haftar-aligned administration, each spending against the other — dual budgets totalling some $46bn in 2024 forced two dinar devaluations in under a year, including a 14.7% cut in January 2026. Militia violence flared repeatedly in 2025, the Tripoli central bank was attacked, and fuel smuggling has drained billions. With ~90% of revenue from oil and a history of blockades tied to governance disputes, the upside is perpetually hostage to whether the political settlement holds.