Italy can probably stay out of WW2 and ship Germany oil as a neutral. Having oil revenue makes Italy military stronger due to having a higher budget to spend on the military, especially the navy, to ensure that oil continued to flow. If the Allies push Italy too hard to cut oil to Germany they will find that Italy can join Germany and make their lives a lot more difficult, while making concessions to Italy will be pretty expensive to get them to stop the flow of oil. Certainly Italy will be a lot more concerned about their oil resources and probably build up defenses and infrastructure in Libya to secure it, which goes hand in hand with being able to exploit Libyan oil resources in the first place, which in turn makes it pretty difficult to invade with a well fortified border against Tunisia and Egypt with rail supply from interior ports. The Italians will have a war plan to take Malta early on at all costs due to the threat it represents to their oil supply lines. The Italians would also probably want to invade Egypt quickly if war starts because of the serious threat of British bombers against the pumping stations and oil terminals at the ports. Likely the Italians will want to avoid war, but in the event they feel pushed into it, they will fight quick and hard to shut down all threats to their Libyan oil source, which means going hard against Malta and Egypt to ensure they have a buffer to protect that resource. The Italian navy will certainly be much more active with all the oil it possibly needs to utilize it's fleet, something it lacked IOTL. I'd imagine adventures like Greece aren't an option if Italy really is paranoid about British threats to Libya, so after making an early effort to seize Malta (again assuming they opt to go to war) they will throw as much into taking Egypt as possible. Plus if they do take it quickly they can like up with Italian East Africa via the Suez and use their fleet aggressively all over.