The fight against human smuggling has become one of the main cornerstones of the strategy developed by the EU to contrast irregular immigration, in particular since the migrant crisis of summer 2015. Analysing the case of the EU approach to Libya, the article highlights the characteristics of the smuggling market in relation to the country’s “war economy”, and above all the role that these resources can play in strengthening specific actors, including the various militias. Overall, the international political economy perspective adopted here shows how dynamics of co-optation/competition associated with human smuggling – as well as some external policies – are altering the political balance within the complex Libyan framework, transforming local economies and challenging security structures in ways that they could potentially have a profound impact on Libya’s stability, on the security of the Mediterranean and therefore on the long-term interests of the EU.