Global Oil Market Prospects and Their Implications for Financing in Libya An Analytical Study of the Libyan Economy During the Period (2010–2023)

Abstract

This study aims to analyze the impact of global oil market fluctuations on the Libyan financial system during the period 2010-2023, focusing on how oil revenues are used to finance the general budget and the associated challenges. The study employs a quantitative analytical approach supported by trend analysis and scenario analysis, utilizing official data from the National Oil Corporation. The Central Bank of Libya, in addition to reports from international organizations, also contributed to the study. The study reached the following conclusions: First, oil revenues constituted, on average, more than 90% of total public revenues. Second, the study showed that the foreign reserves of the Central Bank of Libya declined from a certain amount from approximately $106 billion in 2013 to about $83 billion in 2014, a decrease of roughly $23 billion, the country also suffers from near-total dependence on oil as its source of revenue, making it vulnerable to external shocks and price volatility. This dependence has led to recurring liquidity crises, exacerbated fiscal deficits, and weakened the effectiveness of monetary policy. The study also revealed the leakage of cash outside the banking system. The decline in confidence in banks exacerbated the financial crisis. The study also recommends structural reforms, including diversifying revenue sources, promoting digital payments, reforming monetary policy, and restructuring the relationship between the National Oil Corporation and the Central Bank.