Libya's Fast Shrinking Economy: Oil Industry Decimated After Years Of Conflict, $68B Lost

Conflict-gripped Libya has lost more than $68 billion worth of oil revenue in recent years as a power struggle among rival factions has decimated the economy, the Financial Times reported Sunday. Some 75 oil fields have been shut down as spiraling violence has plagued the country's primary export.

“The economy is in a very critical situation,” Mustafa Sanalla, chairman of the state-run National Oil Corp., which offered the estimate of losses, told the Financial Times. “Relations between the two governments are really very bad and it has crippled the oil industry.”

Libya has been torn by conflict since rebels ousted strongman Moammar Gadhafi in 2011 with the support of Western airstrikes. His removal came after a widespread uprising, part of the protest movement that swept much of the Arab world, spiraled into a civil war.

Since then, a power struggle has erupted between two divergent factions. In the east, an internationally recognized government rules from the city of Tobruq while in the west, Tripoli is the seat of an Islamist-leaning government.

Both sides have fought for control of the country’s oil infrastructure, basically Libya's only export, as a deficit reached 54 percent of the gross domestic product last year. The country was reportedly the world’s fastest-declining economy. A unity agreement was signed last year to help bring an end to violence, but has not yet gone into effect.

At the same time, the Islamic State group (aka ISIS) has established a base in the country amid a power vacuum with up to 3,000 fighters now controlling parts of the cities Derna and Sirte. An armed force — the Petroleum Facilities Guard — reportedly has been deployed to protect oil infrastructure. ISIS fighters have launched attacks against oil fields in recent days as images have surfaced showing huge black plumes of smoke rising above crude storage tanks.