The New York Times had an interesting piece yesterday about the potential opening up of Libyan oil to American companies. Some of the key points: 1) Only 25% of Libya is currently considered mapped for oil; 2) Libya probably has the largest oil reserves in Africa; and 3) Libya's current reserves could provide the US with fuel for 8 years.
While there are many hurdles to cementing economic oil ties between the US and Libya, none of this would be possible if it wasn't for the war in Iraq. Qaddafi, after living in isolation from the West over his terrorism involvement in German disco clubs and the Lockerbie Pam Am bombing, turned over his weapons of mass destruction (ie., nuclear program) to US and British inspectors (NOT the UN watchdog the IEAE) in late 2003.
This bodes well for both countries as we possibly gain another source of oil outside of the troubled Middle East and Libya has the opportunity to receive Western dollars to hopefully make needed economic change within the country. However, it is hard to be optimistic about Qaddafi. Needless to say, he is taking credit for Bush's electoral victory.