The Time columnist Robert Baer had a source close to the Libyan regime telling him that Gaddafi has ordered the destruction of oil pipelines, cutting off flow to Mediterranean ports.

There's been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports, Baer wrote.

The worsening violence in Libya and the continued uncertainty in Bahrain have sent shockwaves through world oil markets, and prices have started going north in anticipation of supply breakdowns. Crude prices spiked up around seven percent on Tuesday morning in New York, inching towards two-year highs.

The political crisis in Libya, which is Africa's third-largest oil producer, has already forced many oil companies to halt production and exports.

Observers think Gaddafi's message to the Libyans and the rest of the world is that once he is gone, the country will slip into anarchy, and one major fallout would be energy supply disruptions in the Middle East.

The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos, Baer wrote.

Gaddafi's numerous other utterances on Tuesday betrayed borderline mania all serious dictatorships are imbued with.

He said he will cleanse Libya house by house if anti-government protesters do not surrender and that the protesters will be executed. While he accused the protesters of being under the influence of hallucination pills, he himself lived the day in delusion, saying he will die as a martyr and that he can’t step down as he is a revolutionary, not a president.

He then asked his supporters to take over the streets, and said that once he starts using force, Libya will burn.

The Time columnist’s source told him that Gaddafi has plans to release hundreds of Islamist militants from prison, hoping they will unleash chaos in the country.