The fight broke out over the future of Libya's largest oilfield, as armed forces loyal to the UN-recognized Tripoli-based government are leading the Libyan National Army (LNA) forces led by Field Marshal Khalifa Haftar, the leading figure in the east of broken Libya.
The Al-Sharara field, 560 miles south of Tripoli, is capable of producing 315,000 barrels of crude oil per day – about a third of Libya's total power output. But it has been closed by the Libyan National Oil Corporation (NOC) since December, when the plant was seized by local tribes who demanded that the government of Tripoli do more to get the area out of poverty.
The fighting has the potential to interrupt the long-awaited plans of the UN to convene a national conference, possibly next month, which should lead to parliamentary or presidential elections and a new constitution. There is no date or location for the conference set by the UN, which is still trying to reach an agreement on those attending the meeting and the broad agenda.
Haftar troops, already in control of large parts of Libyan oil, including in the "crescent moon" in the north, moved south last month, which was billed as an operation to eliminate terrorists and militias.
A spokesman for LNA, Lt Gen Ali Suleiman Muhammad claimed on Wednesday that the forces of Haftar had conquered al-Shara oil fields largely without a fight, in combination with the forces that previously controlled the field.
This was later contradicted by other local reports that suggested that five people were killed and 16 injured during the fighting.
The UN-backed government of the national agreement condemned Haftar's move and said the loyal forces at the GNA had been drawn south to protect the fields from Haftar.
If Haftar could conquer the southern oil field, he would shut down most Libyan oil production, putting him in a stronger position in UN-supervised elections held this year. The oil crescent contains the most important oil export terminals.
It took weeks weeks of intense international diplomatic pressure in June to convince Haftar that the half-moon proceeds were transferred to the Tripoli-based NOC and not to a smaller competitive oil company in the east. Markets got 800,000 barrels per day and Libya loses $ 930 million (£ 718 million) in sales.
The company is one of the few Libyan institutions that has functioned effectively as a national non-partisan power, and has provided much needed money to prevent the Libyan budget getting deeper and deeper into debt. The NOC wants to drive oil production from 1 m barrels per day to as high as 2.1 m in 2021, but the conflict over al-Sharara oil field questions that goal.
Heftar's urge to the south seems to have multiple motives, including his claim to expel terrorists and militias from remote areas that have long acted as a funnel for migrants coming through Africa. He has also claimed that the Chadian troops are trying to oust the president of their country, Idriss Déby, to be active in the area.
The southern displacement of Haftar was aided by the French Air Force on Sunday. Paris admitted in the weekend that the fighter planes had bombed a column of 40 rebel pick-up trucks after having crossed northern Chad from Libya – insurgents whose LNA claimed to have fled the offensive.
A rebel group against Déby said it was the target of the strikes.
The French Foreign Ministry said Tuesday that the operation of Haftar had "eliminated terrorist targets" and was a way to "permanently obstruct" the activities of human traffickers.
Southern Libya is one of the most lawless parts of a country that has been broken by a six-year civil war. The region is also the scene of a struggle between the Tubu community in Libya and Arab tribes, particularly on the control of cross-border smuggling routes.
Libya's Tubu, part of a larger cross-border ethnic group, have long complained that their rights are not recognized in a largely Arab country. Some members accuse the LNA, which counts Tubu hunters among its ranks, of leading rival Arab tribes to disrupt their villages and cities.
In an attempt to bring more order to the oil industry, the NOC president Mustafa Sanallah wants to set up a real national oil protection watch to protect the locations against repeated capture by militias. Youssef Kalkouri, a Tubu jurist in the eastern administration of Haftar, said that his community is categorically opposed to Arab tribes entering their cities.