20110301 petroleum worker 35
A petroleum worker walks through a Libyan oil refinery in Al Brega, Libya. Libya has the largest oil reserves in Africa and petroleum exports account for 95 percent of the country's export earnings. - 


STEVE CHIOTAKIS: The price of oil is stable today at around $97 a barrel. That's despite Libya's oil chief saying chaos has cut production there by half. Opposition forces to Colonel Moammar Gadhaffi continue to get closer to Tripoli. One place where they've already staked a claim is Benghazi, in the east.

As part of Marketplace's continuing coverage of the region, the BBC's Kevin Connolly is with us from Benghazi. Good morning Kevin.

KEVIN CONNOLLY: Morning Steve.

CHIOTAKIS: If a civil war were to break out there Kevin, which seems possible now, would this humanitarian crisis in Eastern Libya would that get worse?

CONNOLLY: I think there are two separate issues you. The first is that outside trade is effectively impossible at the moment for all Libyans. And the second is most foreigners who are living here are of course trying to get out -- Americans, British, French and German among them. There's not question that the humanitarian problem is growing here because Libya's a centrally controlled economy. And central control has simply broken down.

CHIOTAKIS: Let's talk a little bit about the economy for just a moment because the U.S. has seized a lot of Libyan assets, the EU has pushed through some sanctions as well. And oil has been greatly curtailed there. Do you see any of that on the ground where you are?

CONNOLLY: In Benghazi, at a very basic level, the economy is continuing to function. Shops are open for business, a lot of offices are open. But Libya's economy is entirely based on the fact that it's an oil exporting nation. Anything which turns off the taps of the oil industry is going to effect the Libyan people in a very short period of time. And crucially, Libyan bank notes are printed in Britain, and the British moves against the Libyan economy include the embargoing of an export of bank notes, so literally, money will start to run out very soon.

CHIOTAKIS: All right the BBC's Kevin Connolly in Benghazi. Kevin thank you.

CONNOLLY: Thanks Steve.