With Russia still preoccupied with the war in Ukraine and China focused on the Taiwan issue, the United States and its key Western allies — notably the UK, France, and Italy — continue to secure important geopolitical gains across the Middle East and North Africa region. After Moscow lost its main regional ally in Syria, those allies moved quickly not only to strengthen their position there, but also in Libya, which has long been of interest to the Kremlin, especially following the ill-judged — even by Western standards — overthrow of Libyan leader Muammar Gaddafi in 2011.

This time, a more coherent approach toward the North African oil state appears to be taking shape. It is based on expanding the presence of Western oil and gas companies across multiple Libyan sites, then using that economic footprint as a lever of political influence as well. This raises a key question: does the recent return to deepwater drilling in the Sirte Basin after a 17-year pause represent a decisive shift in the plan to gradually reintegrate Libya into the Western sphere of influence — and can that strategy succeed?

The West still has strong fundamentals to build on in Libya’s oil and gas sector. Before Gaddafi’s removal and the civil war that followed, Libya was producing about 1.65 million barrels per day of crude oil, most of it high-quality light sweet crude that is in strong demand across the Mediterranean and northwest Europe. The country also holds Africa’s largest proven oil reserves, estimated at around 48 billion barrels.

Production had been on an upward path in the years leading up to Gaddafi’s fall, rising from roughly 1.4 million barrels per day in 2000, although still far below the late-1960s peak of more than 3 million barrels per day. At that time, Libya’s National Oil Corporation had begun plans to apply enhanced oil recovery techniques to mature fields, with projections to lift capacity by about 775,000 barrels per day viewed as realistic and technically grounded.

At the height of the civil war, however, crude output collapsed to around 20,000 barrels per day. Although production later recovered to just under 1.3 million barrels per day — the highest since mid-2013 — repeated politically driven shutdowns in recent years pushed output down to a little over 500,000 barrels per day for extended periods.

Despite this instability, growing high-level political focus from Washington and its allies on Middle East and North Africa suppliers capable of offsetting Russian oil and gas has revived Western international oil company interest in Libya. This was reflected in the strong response to Libya’s first licensing round since 2011, with more than 40 international oil companies registering interest in 22 onshore and offshore blocks.

These new agreements build on earlier deals by several European firms, including France’s TotalEnergies, which in 2021 agreed to continue efforts to raise production from the giant Waha, Sharara, Mabrouk, and Jurf fields by at least 175,000 barrels per day. The company also agreed with the National Oil Corporation to prioritize development of the North Jalo and NC-98 fields in the Waha concession, with combined potential of at least 350,000 barrels per day.

Later, Shell confirmed it would assess exploration opportunities in Libya, while US major Chevron said it planned to return after exiting the country in 2010.

These moves align with the National Oil Corporation’s goal of raising Libyan oil output to 2 million barrels per day by 2028, supported by the recently reactivated Strategic Programs Office. That office had previously targeted 1.6 million barrels per day before rising political tensions last year disrupted its plans.

Success depends partly on the current licensing round, as between $3 billion and $4 billion in investment is needed to reach the initial 1.6 million barrel per day target by 2026–2027. The 22 offered blocks include key acreage in the Sirte, Murzuq, and Ghadames basins, as well as offshore Mediterranean zones. Around 80% of Libya’s discovered recoverable reserves lie in the Sirte Basin, which also holds most of the country’s production capacity.

Smaller projects that preceded the latest major company entries have already delivered results. Waha Oil Company has said it lifted output by 20% since 2024 through intensive maintenance, reopening shut wells, and drilling new ones. The National Oil Corporation has indicated similar programs helped drive recent national production gains, alongside new discoveries by AGOCO and Algeria’s Sonatrach in the Ghadames Basin and Austria’s OMV in Sirte.

BP signed a memorandum of understanding last year to evaluate redevelopment options for the giant Sarir and Messla onshore fields in the Sirte Basin, along with unconventional oil and gas potential. BP said the deal reflects its strong interest in deepening partnership with the National Oil Corporation and supporting Libya’s energy future.

In the Sirte Basin itself, BP and Italy’s Eni have begun drilling Libya’s first deepwater offshore well in nearly two decades. This step is viewed as more significant than other recent Western moves because deepwater drilling requires long-term capital commitments, political confidence, and security assurances that companies do not accept unless they believe stability and Western alignment are improving.

The project targets the Mtsola exploration area in offshore Block 38/3. BP and Eni each hold 42.5% stakes, while the Libyan Investment Authority holds 15%. The joint venture has committed to drilling 16 additional wells across Libya, both onshore and offshore.

Still, questions remain about whether this marks a decisive Western influence shift. A core problem persists: the underlying drivers of Libya’s repeated political crises — which lead to damaging oil shutdowns — remain unresolved.

The September 18, 2020 agreement that ended a series of economically destructive oil blockades made peace conditional on specific goals, according to Libyan National Army commander Khalifa Haftar, with the UN-recognized Tripoli government agreeing at the time.

The central condition was a lasting settlement on how oil revenues are distributed nationwide. A joint technical committee was meant to oversee oil revenues, ensure fair distribution, prepare a unified budget, resolve allocation disputes, and require the Tripoli central bank to execute approved payments without delay.

None of these mechanisms has been fully implemented. As a result, the core revenue-sharing fault lines remain in place, leaving the door open to renewed unrest and future production shutdowns.

US stock indexes were mostly lower during Wednesday trading, with the exception of the Dow Jones, following the release of weak economic data.

Markets are still tracking corporate earnings results. AMD shares fell 13% to $210.9 after the company issued disappointing financial guidance, despite reporting record revenue for the fourth quarter of 2025.

Alphabet is scheduled to report its fourth-quarter earnings after today’s session close, while Amazon is due to release its results tomorrow.

Government data released today showed that the US private sector added 22,000 jobs last month, well below expectations for a gain of 45,000, signaling continued slowing in the labor market at the start of 2026.

Due to the ongoing government shutdown, the monthly US jobs report for January — which had been scheduled for release this coming Friday — was announced yesterday as postponed.

In trading, as of 16:30 GMT, the Dow Jones Industrial Average rose 0.8%, or 390 points, to 49,635. The S&P 500 declined 0.2%, or 12 points, to 6,905, while the Nasdaq Composite fell 1.0%, or 240 points, to 23,016.

Bitcoin traded near its lowest levels in 15 months on Wednesday, after a sharp selloff pushed the world’s largest cryptocurrency close to $73,000, amid heavy position liquidations and growing risk aversion across markets.

Bitcoin was last down 2.8% at $76,509.1 as of 01:56 a.m. US Eastern Time (06:56 GMT), after earlier falling to $73,004.3 — levels not seen since November 2024.

Following the weekend pullback, Bitcoin dropped about 12% last week, after losing 10% in the prior week.

This decline marks its lowest level since Donald Trump’s US presidential election victory, effectively erasing the gains that had been driven by optimism over a potential easing of regulatory restrictions on the cryptocurrency sector.

Bitcoin falls to a 15-month low amid broad liquidations

The drop was accompanied by large liquidations of leveraged long positions. Data from crypto analytics firm CoinGlass showed that nearly $740 million in bullish bets were liquidated over the past 24 hours, as falling prices triggered margin calls and forced traders to close positions.

Bitcoin’s weakness reflects a sharp reversal from the rally seen late last year, when the token surged following Donald Trump’s election victory.

At that time, investors moved into cryptocurrencies on expectations that the new US administration would adopt a more supportive regulatory stance toward digital assets. Bitcoin was also supported by US Federal Reserve rate cuts starting in December 2024, which boosted demand for higher-risk assets.

By contrast, gold and other traditional safe havens recovered on Wednesday amid escalating geopolitical tensions between the United States and Iran.

Crypto markets are also facing uncertainty over US monetary policy after Trump nominated former Federal Reserve governor Kevin Warsh to lead the central bank.

Warsh is widely viewed as hawkish, raising concerns about market liquidity.

Cryptocurrency prices today: Altcoins weaken and Cardano drops 6%

Most altcoins continued to underperform on Thursday, posting larger losses than Bitcoin.

Ethereum, the world’s second-largest cryptocurrency, fell 2.3% to $2,268.92.

XRP, the third-largest cryptocurrency, declined 1.1% to $1.59.

Oil prices rose on Wednesday after the United States shot down an Iranian drone and armed Iranian boats approached a US-flagged vessel, bringing fears of a potential escalation between Washington and Tehran back into focus ahead of expected talks between the two sides.

Brent crude futures climbed by $0.46, or 0.7%, to $67.79 per barrel by 10:34 GMT. US West Texas Intermediate crude rose by $0.52, or 0.8%, to $63.73 per barrel.

Both benchmark contracts have seen sharp swings this week between reports of talks aimed at easing tensions between the United States and Iran and growing concerns about possible disruptions to oil flows through the Strait of Hormuz.

At the same time, a broad selloff in equity markets — which often move in tandem with oil prices — limited crude’s gains.

PVM analysts said in a note that oil prices would have been lower if not for the renewed saber-rattling in the Middle East.

The US military said on Tuesday it had shot down an Iranian drone that approached a US aircraft carrier in the Arabian Sea in what it described as a hostile manner.

In a separate incident, shipping sources and a security consultancy said a group of Iranian armed boats approached a US-flagged oil tanker north of Oman. The United States and Iran are scheduled to hold talks in Oman on Friday, according to a regional official.

OPEC members — including Saudi Arabia, Iran, the United Arab Emirates, Kuwait, and Iraq — export most of their crude through the Strait of Hormuz, mainly to Asian markets.

Oil prices also drew support from industry data showing a sharp drop in US crude inventories. Stockpiles in the world’s largest oil producer and consumer fell by more than 11 million barrels last week, according to sources citing figures from the American Petroleum Institute.

Official data from the US Energy Information Administration is due at 15:30 GMT.

Analysts surveyed by Reuters had expected a build in crude inventories, in contrast to the industry figures.

In Tuesday’s session, oil prices were also supported by a trade agreement between the United States and India that boosted hopes for stronger global energy demand, while continued Russian attacks on Ukraine reinforced concerns that Russian oil could remain under sanctions for longer.