Oil producer’s lies end badly (7)
I believe the answer is:
linseed
'oil producer's' is the definition.
(linseed oil)
'lies end badly' is the wordplay.
'badly' is an anagram indicator.
'lies'+'end'='liesend'
'liesend' with letters rearranged gives 'LINSEED'.
(Other definitions for linseed that I've seen before include "Type of oil" , "Oil applied to cricket bats" , "Oil produced from flax" , "Source of plant oil" , "Flax product, a source of oil" .)