For decades the relationship has been simple: Libya produces oil and Britain buys it. That remains largely true, and it is an inadequate way to understand the country. The relevant question is not only how much oil Libya can lift, but whether oil revenue and energy can be converted into other export industries, and into demand for what Britain actually sells.
Oil is still the economy
Libya remains one of the world’s most hydrocarbon-dependent states. The World Bank puts oil and gas at around 65% of GDP, 93% of exports and 72% of government revenues in 2024, while the private sector employs about 14% of the workforce. When output stops or prices fall, the fiscal shock is immediate. The same surplus could, in principle, pay for power, ports and plant, but in practice it often disappears into a fragmented state and a large public payroll. The choice is not oil or diversification. Libya will keep producing hydrocarbons; the question is whether they stay at the end of the economic chain.
Britain is still mainly a buyer
UK-Libya trade was £2.4 billion in 2025, according to the Department for Business and Trade: £2.1 billion of British imports and £368 million of exports, up about 18% from a small base. By early 2026 the rolling total had fallen to £1.9 billion, almost entirely because imports dropped. Britain buys crude, while Libya barely buys Britain, and a one-year bounce in exports does not change that.
A plant in Benghazi is not a transition
The clearest exception now on the books is not British. Reuters reported in September that Tosyali-SULB, a Turkish-Libyan joint venture, expects a direct-reduced-iron complex east of Benghazi to attract around $2.5 billion, with production planned for early 2028. Full design capacity is about 8.1 million tonnes a year, and the first phase is about 2.7 million, mostly for export. Gas for that phase has been agreed, and a dedicated power station is being built. That is a serious project if it is finished. DRI can be made with gas rather than coal, and the site faces Europe, but it is also an announcement with a Turkish industrial lead and a 2028 start date. Expected investment is not money spent, and a plant in the east does not rewire the national accounts. What it shows is a chain Libya has rarely completed: gas as an industrial input, iron as a manufacture, and power built around the factory rather than the terminal.
Two economies, not one strategy
Ahmed Gadalla, the joint venture’s chairman, also chairs Libyan Cement Company, which lists three plants and about two million tonnes of capacity for eastern reconstruction demand. AlSahl Group, founded in 1959 in the west, works across milling, poultry, packaging and building materials. One is heavy industry under eastern sponsorship, and the other is a western agribusiness group. Neither is proof of a national industrial middle; they are parallel bets in a divided country.
What Britain could sell
Britain does not need to own the factories. It can sell project finance and insurance, English-law contracts, power and gas-processing services, specialised equipment, and work on ports and water. Those markets are contested. Italy has geography, Turkey is already on the Benghazi site, work in the east and west runs through different authorities, and payment risk is real. If that does not change, Britain remains a buyer of Libyan oil and a marginal seller of everything else. When shipping routes tighten, Libyan crude also becomes more valuable to Europe, which can snap policy back to barrels.
Oil gives Libya resources, but capacity is what those resources are spent on. The old relationship is still the real one, in which Libya produces and Britain buys. The better one exists only in pieces. Libya does not need an economy without oil. It needs an economy in which oil is not the last productive thing that happens. Britain’s interest in the barrel may eventually be what gets built after it is sold, if it competes for that work and is honest about how often it will not get it.
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