By the mid-1980s, the government conducted virtually all foreign trade either directly or through public corporations. Import licenses were no longer issued to the private sector. The foreign exchange needed to purchase imports has been allocated by the commodity budget since its inception in 1982. Exports consisted almost entirely of hydrocarbons. Between 1978 and 1985, crude oil exports accounted for between 85 to 99 percent of total annual exports. Exports of other hydrocarbons, mainly methanol and liquefied natural gas, were irregular and depended on bilateral supply agreements of limited duration.
The balance of trade has consistently been in Libya's favor since 1963, when oil exports first reached significant levels. Whereas during the 1970s exports kept ahead of imports by a wide margin, since 1981 this has not been true. For example, during 1982 Libya's trade balance showed a surplus of only LD2 billion, the smallest surplus since the mid-1960s. Only a drastic cut in imports kept the trade balance as a surplus after 1981. In 1985 exports stood at LD 3.2 billion, while imports totaled LD 1.4 billion.
The decline in Libya's trade position after 1981 was largely the result of falling oil prices and decreasing volumes of oil exports. The oil price decline resulted from factors beyond Libya's control, but much of the decline in export volume resulted from Libya's decision to stay generally within its OPEC production quotas. These quotas were reduced in the early and mid-1980s as OPEC tried to use its market power to reverse the falling price trend.
The composition of imports was more varied than that of exports. Figures for 1981 indicated that the largest percentage of imports, by value, was the category of machinery and transport equipment. Manufactured goods, principally metal manufactures and iron and steel, came second, followed by foodstuffs. The percentage of foodstuffs in the import bill has been rising steadily since disposable incomes began rising. The direction of trade has undergone a significant change since the mid-1970s (see table 9, Appendix). Whereas during much of the mid- to late-1970s the United States was Libya's leading export market, American trade restrictions had reduced Libya's trade with the United States to zero by 1983. Italy remained Libya's most important trading partner in the mid-1980s, followed by the Federal Republic of Germany (West Germany). These two countries together supplied about 30 percent of Libya's imports and bought slightly under 50 percent of its exports in 1984.
Data as of 1987