The weekend killing of 31 protesters in Benghazi by one of Libya's rogue militias emphasizes how the out-of-control armed groups terrorizing the country are keeping it in turmoil and blocking restoration of its all-important energy industry.

But arguably more dangerous than that is Libya's emergence as a jihadist stronghold, from where attacks are launched against neighboring states like Niger and Algeria, including vital energy targets.

"The continuing insecurity in southern Libya, especially in the vast area bordering Algeria and Niger, is allowing jihadists to operate freely in the wide region where border security is lacking and geography and diverging national interests hamper multilateral cooperation to contain militants," observed the U.S. private intelligence consultancy Stratfor.

"The activity of jihadist groups is not new across the Sahel region, but the lack of security in Libya since the fall of Moammar Gadhafi's regime has given militants greater access to weapons and sanctuary."

Libya is in political chaos, awash in weapons after the 2011 civil war against Gadhafi and the steady growth of jihadist strength in the long-turbulent east and the desert wastes of the lawless south.

But, amid frequent clashes between myriad militias, most of them only nominally under state control, the Tripoli government getting ready to launch a new oil licensing round to boost oil and gas production,

However, there's widespread skepticism the major African producer will be able to pull it off with the heavily armed militias still running wild 18 months after Gadhafi was killed and his quirky, unpredictable 42-year rule came to an end.

Security insiders say jihadists of al-Qaida in the Islamic Maghreb, pushed out of Mali by the French-led military intervention launched Jan. 11, have established at least three bases in the desert of southern Libyan.

The bombing of the French Embassy in Tripoli April 23 rammed that home. Other foreign missions in Benghazi, capital of eastern Libya and long a jihadist stronghold that was a thorn in Gadhafi's side, have been attacked.

They include the U.S. Consulate, which was hit Sept. 11, 2012, the anniversary of al-Qaida's 2001 suicide attacks on the United States.

The visiting US ambassador, Christopher Stevens, was killed along with three other Americans.

U.S. security officials say they've identified five men who may have participated in the killing of the Americans. All are thought to be members of Ansar al-Sharia, a Libyan jihadist militia whose fighters were seen at the U.S. consulate before it was attacked.

The French Embassy bombing was the first such terrorist strike in Tripoli and diplomats believe it was a reprisal for Paris' decision the day before to extend the military intervention in Mali it launched in January.

There's a cruel irony in this.

AQIM's seizure of northern Mali, as a vast jihadist base, followed a rebellion by Malian Tuareg tribesmen who had fought as mercenaries for Gadhafi then returned with a vast arsenal of weapons plundered from his armories.

It was these weapons, now proliferating across Mediterranean Africa, that ignited the Mali war.

"The Mali War was blowback from the Libya War," observed analyst Walter Russell Mead. "Now we have blowback from the Mali War in Libya."

Diplomats report that jihadists are now trekking across the Sahara Desert to join groups in Benghazi and Derna, another jihadist bastion in eastern Libya, to undermine the dangerously fragile democracy struggling to emerge in Libya.

"Libya's become the headquarters for AQIM," a former Libyan intelligence official said.

The deadly Jan. 16 attack on Algeria's In Amenas gas complex was carried out from southern Libya by an AQIM splinter group, the Those Who Sign In Blood Brigade headed by veteran Algerian militant Mokhtar Belmokhtar.

Then on May 23, coordinated suicide bombings against a French-owned uranium plant and a military base in neighboring Niger killed 36 people, including 10 terrorists.

Another AQIM regional ally, the Movement for Oneness and Jihad in West Africa, claimed responsibility for the attacks in conjunction with Belmokhtar's group.

Niger's government said the attacks were carried out from southern Libya.

Tripoli denies that, but Belmokhtar, a one-eyed veteran of the 1980s Afghan war, is currently operating from there.

The swelling violence, and Libya's lack of security has raised concerns that if the regional crisis deepens, as everyone believes it will, oil and gas installations in Libya and across the region will inevitably be attacked.