The terrorists first carried out a suicide car bomb attack on a military checkpoint at the entrance to the town of Al-Sidra, killing two soldiers, said a colonel in the army loyal to the internationally recognized government.
“We were attacked by a convoy of a dozen vehicles belonging to ISIS,” Bashir Boudhfira said. “They then launched an attack on the town of Ras Lanouf via the south but did not manage to enter.”
ISIS has for several weeks been trying to push east from the coastal city of Sirte under its control to reach Libya’s “oil crescent” where key oil terminals such as Al-Sidra and Ras Lanouf are based.
A Libyan oil official told AFP that a 420,000-barrel oil tank in Ras Lanouf caught fire during the clashes.
ISIS on Twitter announced that its fighters had led an “attack on the Al-Sidra area followed by violent clashes with the enemies of God.”
ISIS has taken advantage of chaos in Libya since the 2011 revolt that ousted and killed longtime dictator Moamer Kadhafi to extend its influence there.
Monday’s attack is the first of its kind since ISIS seized Kadhafi’s hometown of Sirte in June 2015.
The group said that the attack came after it took control of Ben Jawad town, 150 kilometres (90 miles) east of Sirte.
No official or army source could confirm this.
Oil is Libya’s main natural resource, with a pre-revolt output capacity of about 1.6 million barrels per day, accounting for more than 95 percent of exports and 75 percent of the budget.
But unrest has forced a major slump in production.
The country sits on reserves estimated at 48 billion barrels of oil, the largest in Africa.
Libya has had rival administrations since August 2014, when an Islamist-backed militia alliance overran Tripoli, forcing the government to take refuge in the east.
The United Nations is pressing both sides to accept a power-sharing agreement it hopes will help reverse gains made by ISIS.
On December 17, under UN guidance, envoys from both sides and a number of independent political figures signed a deal for a unity government.
It calls for a 17-member government, headed by businessman Fayez el-Sarraj as premier, based in Tripoli, AFP reported.
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