For decades, U.S. involvement in Libya has oscillated between neglect and fleeting moments of attention and resolve. But so far, the second Trump administration has displayed a surprising degree of interest in the oil-rich country. It appears to want to end the long-standing stalemate between Libya’s two ruling factions—the UN-recognized government of Prime Minister Abdulhamid Dabaiba in the west in Tripoli and the domain of Field Marshal Khalifa Haftar, based in the eastern city of Benghazi.

In the past year, this push has been spearheaded by Massad Boulos, U.S. President Donald Trump’s senior adviser for Arab and African affairs. After rounds of shuttle diplomacy, Boulos announced an apparent breakthrough earlier this month: the two rival governments had agreed on a unified budget for the first time in years. Boulos hailed the deal on social media as “a milestone for cooperation that offers many benefits for the economy and for Libyans across all regions.” The agreement is certainly a step in the right direction. But Washington should not imagine that what is essentially a financial deal between two dynasties constitutes a major advance toward political unification. The April 11 agreement does not address the deeper drivers of Libya’s crisis and raises the risk of renewed destabilization.

Although Libya has not seen major armed hostilities since 2020—when a nearly two-year-long civil war sparked by Haftar’s attack on the Tripoli government came to an end—the continued extraction of state resources for personal gain by both ruling factions has left Libya in a profound fiscal crisis and without a unified executive. Successive efforts to deal with these challenges have failed. In 2020, the UN launched an initiative aimed at unifying the banking sector, ensuring greater transparency in the oil sector, and encouraging local governance reforms. These measures were supposed to pave the way for a unified government with restructured political institutions and, within a year, national elections. Partly because of halfhearted support from the Biden administration, the elections never materialized, and the UN push fell apart. In 2022, the United Arab Emirates, with U.S. acquiescence, brokered a deal behind closed doors that saw the Dabaiba family install a Haftar-aligned chair at the helm of the National Oil Corporation, Libya’s sole wealth generator. By 2025, that formula had averted further civil war but done little else. Libya was mired in economic crisis and political paralysis.

A key reason for the failure of the 2022 deal was its transactionalism—the errant belief that Libya’s political gridlock could be broken by appealing to the commercial interests of competing elites rather than by addressing the needs of the Libyan people. But this exact logic underlies the current approach of the Trump administration. Instead of striving for a flashy diplomatic breakthrough and an economic deal with unelected elites, Washington needs to pursue a broader and more inclusive path in Libya. It must support existing UN efforts to bolster the independence of Libya’s financial and administrative institutions and lay the groundwork for national elections. And it must do more to rein in the disruptions caused by Turkey, the single most consequential foreign actor in the country. Only then will the United States truly help prevent Libya from slipping into greater........

© Foreign Affairs