Libya is facing its most critical moment since the ouster of veteran strongman Moammar Gadhafi in 2011, with strikers and armed groups blockading oil fields and terminals.
"We are currently witnessing the collapse of state in Libya, and the country is getting closer to local wars for oil revenues," the Swiss oil analyst Petromatrix said.
With the government forced to import fuel to keep power stations running and lines growing at gas stations, Prime Minister Ali Zaidan has repeatedly threatened to send troops to retake striking ports.
But the leader of rebels blockading ports in Cyrenaica, home to the bulk of Libya's oil, warned that such a move would be tantamount to a "declaration of war."
Ibrahim Ali Jathran, commander of troops who have defected to seize the terminals, said his soldiers would fight back.
Jathran insisted the strike was in reaction to what he said was a seizure of power — and oil revenues — by the Muslim Brotherhood in Tripoli.
"The Brotherhood has hijacked the state and parliament. It has infiltrated the oil ministry with armed groups," he said.
The blockade has spread to western Libya, with the Elephant field on the Algerian border at a standstill and rebel oil guards further north around Zintan cutting pipelines.
A critical question is how the oil giant BP will react. BP — the largest oil company left in Libya after Shell pulled out last year — declined comment on the situation there, according to The Guardian.
Industry experts with close links to the company said it was keeping a watchful eye on events.
"The fact is BP does not really need to do anything currently as they have no real investments or personnel in the country yet," said one oil-industry analyst, who predicted BP would postpone expansion plans in Libya if the instability continued.
The British oil giant re-entered Libya in 2007 after a deal cemented by Prime Minister Tony Blair and Gadhafi, but it has repeatedly postponed drilling in the wake of the Arab Spring and the violence and chaos that followed the dictator’s overthrow two years ago. Now some wonder if it will quit the country again.
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