Rival armed factions are fighting for control over crucial oil terminals in the east of Libya.
The forces of military strongman Khalifa Haftar, who have controlled the "oil crescent" since September, have lost ground, their spokesman says.
He said they had carried out air strikes against a faction known as the Benghazi Defense Brigade, after it launched an attack on Friday.
Four oil terminals in the area provide much of Libya's export income.
Libya remains regionally split with two centres of power that politically oppose each other, and a myriad of rival armed groups that the country's two governments cannot control.
Field Marshall Khalifa Haftar is allied to an administration based in the eastern city of Tobruk, which is challenging the authority of the UN-backed unity government based in Tripoli.
His forces, known as the Libyan National Army (LNA), have been battling Islamist and other militias in the area, after forcing them out of much of the country's second city, Benghazi in February 2016.
Oil exports resumed after the LNA took over the oil crescent, giving a strong boost to the country's output after a blockade of nearly two years.Image copyright Getty Images Image caption Field Marshall Haftar is allied to a rival parliament based in the eastern city of Tobruk
It remains unclear exactly how much control the Benghazi Defense Brigade has gained.
A diplomatic source, who asked not to be named, told the BBC that much of the oil crescent had been overrun by the Benghazi Defence Brigade, including Sidra, Ras Lanuf and Naufliya, but this cannot be independently confirmed.
The spokesman of the LNA, Colonel Ahmad al-Mismari, said on Friday that it had retreated to avoid civilian casualties.
On Saturday, he said the group had lost control of Ras Lanuf's main airfield, AFP news agency reported.
The Benghazi Defence Brigade is composed of a mix of armed groups, including Islamists, tribal-affiliated militias from the east who oppose Field Marshall Hafter, and an armed group that previously controlled the oil crescent.
Libya's National Oil Corporation (NOC) held an urgent meeting on Saturday to review crude loading schedules and emergency measures to protect oil facilities in response to the fighting.