The agency on Tuesday reduced its rating on Libya by a massive three notches to BB from BBB. That means Libya’s rating is considered junk status — a low grade for a country with no government debt.

“The downgrades reflect Fitch’s view that the increasingly chaotic political and economic conditions in Libya are no longer consistent with an investment grade rating,” said Charles Seville, director in Fitch’s sovereign ratings unit.

“In addition, a significant portion of the sovereign’s substantial foreign assets, which were key in underpinning its previous rating, have now been frozen by international sanctions,” he added.

Tuesday’s downgrade follows on from last week’s reduction, when Fitch warned that it may take further action if there was no clear political resolution or reduction in violence.

Fitch said yet another downgrade could be in the offing given the highly uncertain situation.

Fitch added that disruption to the country’s oil production and to the wider economy is also increasing.

The agency has had a rating on Libya for only a couple of years as part of the country’s efforts to open up its economy after it improved its relationship with Western governments.

Rival Standard and Poor’s has also downgraded Libya’s rating over the past week.

The rating blow came as the chairman of Libya’s National Oil Corporation said Libya’s oil output had dropped by almost half due to the departure of oil workers, while its oil installations are undamaged.

The comments point to a consensus emerging that about 800,000 barrels per day (bpd) of output in the world’s 12th-largest exporter has been shut down, not as high as some estimates of more than 1 million bpd.

Shokri Ghanem, who spoke to Reuters by telephone from his office in Tripoli, also said NOC was still overseeing Libya’s oil production and exports. He declined to comment on reports of a split in the national oil firm.

“NOC is still coordinating the production and exports. All the Libyan oil installations are safe. Oil wells and oil fields are not damaged,” he said.

“Almost half of the production went down. Some fields are still producing at capacity. Some are closed. It depends on the labor.”

Libya normally produces 1.6 million barrels per day (bpd), almost 2 percent of world output, so Ghanem’s comments imply about 800,000 bpd is shut down, similar to an estimate from the International Energy Agency on Monday.

Other estimates have been higher. Eni Chief Executive Paolo Scaroni said on Monday he thought two-thirds of Libyan oil and gas output had been halted. Last week, he put the loss at 1.2 million bpd.

Oil prices pared an earlier gain on Tuesday to trade at $112 a barrel. Concern about supplies due to the Libyan crisis sent prices toward $120 last week for the first time since 2008.

Ghanem, who frequently speaks to media about oil prices and OPEC production policy, had not been available to comment since the uprising began against the rule of Libyan leader Muammar Qaddafi.

He said on Tuesday Libyan oil output had fallen by almost half, because workers had left rather than because of damage to the installations.

“It is basically due to the laborers leaving because of the panic,” he said. “If they come back, it is well protected and production can continue as before.”

“We are taking all precautions so that gas continues flowing to the power stations,” he said.

A Libyan official told Reuters on Monday that a unit of NOC had decided to operate separately from its parent until Qaddafi is overthrown.

Hassan Bulifa, a member of the management board of Agoco, a unit of NOC, said in the eastern city of Benghazi that his firm was considering setting up its own marketing division to sell crude.

Ghanem declined to comment on the development and said NOC remained in control.

“I am in my office; we are running the business; we are trying to do our utmost to keep the oil installations safe,” he said.