Report: Gaddafi to sabotage oil wells

The situation in Libya is unraveling, and it may be about to get even worse.

According to Time's Robert Baer, a Gaddfi insider says the embattled Libyan leader has ordered the destruction of oil facilities, the source of 95 percent of the country's export earnings:

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

There's more:

Gaddafi's desperation has a lot to with the fact that he now can only count on the loyalty of his tribe, the Qadhadhfa. And as for the army, as of Monday he only has the loyalty of approximately 5,000 troops. They are his elite forces, the officers all handpicked. Among them is the unit commanded by his second youngest son Khamis, the 32nd Brigade. (The total strength of the regular Libyan army is 45,000.)

My Libyan source said that Gaddafi has told people around him that he knows he cannot retake Libya with the forces he has. But what he can do is make the rebellious tribes and army officers regret their disloyalty, turning Libya into another Somalia. "I have the money and arms to fight for a long time," Gaddafi reportedly said.

Further disruption promises to unnerve global oil prices, which have already surged to their highest levels in two and a half years. Some 90 percent of Libya's oil exports originate from the eastern region of Cyrenaica, epicenter of the revolt.

Libya holds the largest oil and gas reserves in the region. Major oil companies — including Eni, BP, Total and others — have been evacuating key personnel from the country.