The WSJ reports,"parts of Iraq's main oil refinery were in flames Wednesday as government forces fought to repel militants who gained partial control of the oil facility, Iraqi security officials said".
"Sunni militant fighters behind a week-old offensive that has claimed several major cities and towns in northern Iraq attacked the refinery in the northern city of Baiji overnight and seized part of the installation, an oil ministry official in the country's north said.
The official said employees fled the refinery as it came under attack, the latest in a weeklong siege of the oil hub.
The fighting over the main source of Iraq's refined fuel for its domestic market doesn't affect production or exports from the country's oil fields and facilities in the south, where militants haven't reached.
But the fall of the Baiji refinery to rebel control would intensify the turmoil inside Iraq, as well as open to militants another major potential source of income.
The price of crude oil hasn't reacted specifically to the Baiji news, said Cuneyt Kazokoglu, an analyst at FACTS Global Energy in London, but if the refinery is closed Iraq's gasoline and diesel imports will likely increase.
In midmorning trading, oil was at $113.50 a barrel and hovering close to 9-month highs touched June 14, just after the crisis in Iraq crisis broke.
Reuters reported mortar strikes and machine-gun fire at the refinery Wednesday morning as government forces and militants battled for control. Officials said some fuel storage centers inside the installation were on fire.
Militants including hundreds of fighters from the Islamic State of Iraq and al-Sham, or ISIS, are battling to hold captured cities and seize more territory in their offensive against the Shiite Muslim-dominated government of Iraqi Prime Minister Nour al-Maliki.
Iraq's Sunni minority accuses Mr. Maliki's government of systematic discrimination against Sunnis and other sects and political blocs in Iraq. Some Sunni veterans of Saddam Hussein's armed forces and Sunni tribal fighters also are participating in the offensive.
Iraq said government security forces were bolstering their numbers around the north Wednesday in a bid to recapture territory.
In Diyala province, directly to the east of Baghdad, an Iraqi government airstrike targeting a meeting of ISIS fighters killed 15 of them overnight, according to Abdul-Amier al Zaidi, the commander of a government command center.
Security forces were preparing a government offensive to reclaim the area of the attack, Udhaim, from ISIS fighters, Mr. Zaidi said.
The Iraqi military was reinforcing its forces in the Diyala provincial capital, Baquba, after fighting near the city Tuesday.
Authorities also reported fighting Wednesday at the northwestern city of Tal Afar, after militants seized much of that town over the weekend, sending tens of thousands of residents fleeing. Iraqi television on Tuesday showed government reinforcements rolling to that battle".
