Libyan oil output is down by more than two-thirds amid the uprising against the government, which began nearly a month ago, the head of the National Oil Corporation has said.

"Of course, the production is down drastically, or it is only half a million barrels a day down from 1.6 million a day," Shukri Ghanem, CEO of the state-owned firm, said on Wednesday.

Heavy fighting in the central section of the Mediterranean coast has left a string of key oil pipelines and installations in flames.

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On Wednesday plumes of black smoke filled the air after fighting between rebels and forces loyal to Libyan leader Muammar Gaddafi set two oil installations ablaze in the central port city of Ras Lanuf and neighbouring Sidhra, inflicting yet more damage on Libya's crippled energy industry.

Mustafa Gheriani, an opposition spokesman, said the government artillery hit a pipeline supplying Sidhra from oil fields in the desert. An oil storage depot also was hit, apparently by an airstrike, he said.

Gheriani accused Gaddafi forces of intentionally targeting oil facilities as a warning to Europe that the chaos in Libya will hurt oil supplies.

"Gaddafi thinks he can put pressure on Europe, but I think this is just going to work against him,'' Gheriani told AP news agency.

Oil prices escalate

Brent crude oil prices rose 2.55 per cent on Wednesday as escalating fighting in Libya continued to affect the OPEC-member country's oil infrastructure.

Read more of our Libya coverage

Other OPEC members say they are ready to make up the Libya fall but a Libyan oil official said they have shown no sign of doing so yet.

For the past week, government forces and rebels have been battling around several key oil ports east -Brega, Ras Lanuf and Sidhra.

At their peak, those three export terminals handled about 715,000 barrels of crude per day, or roughly 45 per cent of the country's exports, according to figures published in industry publication Africa Energy.

A fourth eastern port, Marsa al-Harigah, handled another 220,000 barrels per day.

In total, those four ports would then account for almost 60 per cent of the country's crude exports.