Political considerations and related security concerns are among the most critical factors in Libya's post-disruption oil production trajectory, and are inherently uncertain. Recently, a stream of encouraging developments has increased confidence in the TNC's ability to manage the oil sector's continued recovery and the country's political transition. But the country's security situation remains fragile, and its economy distressed. Underlying tensions, or, at worst, actual challenges to the distribution of power and resources in the emerging political order, could conceivably derail further gains in oil output or, at least, partially undermine what has already been achieved.
Local staff is largely responsible for Libya's progress to date. A return to full capacity and future growth in the country's oil sector, however, will require renewed participation of IOC capital and expertise. The rate at which foreign IOC employees return to Libya will likely depend on the pace of improvement in security conditions. The status of oil-sector contracts may also influence foreign involvement; TNC officials have stated repeatedly that they will honor all existing contracts, while also pledging to investigate those secured through corruption. Foreign involvement in the sector, including financial arrangements and investment decisions going forward, will be further affected by the evolving relationship between the oil ministry, the NOC, and its subsidiaries.
The extent to which the other members of the Organization of the Petroleum Exporting Countries (OPEC) adjust output as Libya comes back online will have important implications for global oil supply and spare capacity. For this reason among others, the oil markets will be watching closely for signals as OPEC prepares to meet on December 14. Just as the Libyan conflict impacted oil markets, so too can the return of Libyan production.