Dwindling oil reserves in Baghdad lead to soaring prices worldwide fighting raged around Iraq's biggest oil refinery
Baiji oil refinery has come under attack by Isis fighters, threatening Iraq's oil production. Photograph: Karim Sahib/AFP/Getty Images
As fighting raged around Iraq's biggest oil refinery on Wednesday, hundreds of cars queued for hours at petrol stations in Irbil and Kirkuk. Iraqi Kurdistan has so far escaped violence, but supplies of petrol are running low. The shortage is rumoured to have been caused by locally produced fuel being smuggled into Mosul and other affected areas. On Wednesday, prices more than doubled in the course of the day.
The growing threat of civil war is unnerving residents in Kirkuk and Baghdad – but it should also worry consumers around the world. Iraq is one of the world's key oil producers, and until recently its growing crude exports had helped to keep global petrol prices from rising too high, .
The crisis caused by the sudden advance of the Isis insurgents has driven world crude prices past $114 a barrel in recent days and led to warnings of shortages from industry experts. Iraq has always been a major producer, but has increased its output in the past year, at a time when other exporting nations such as Nigeria and Libya have seen supplies reduced due to their own domestic problems.
Earlier this year, the Organisation of Petroleum Exporting Countries (Opec) predicted that 60% of the oil cartel's future production growth to the end of the decade will come from there. This now seems in doubt - at a time when global demand continues to grow as Europe moves out of recession and the economies of energy-hungry developing nations such as China and India continue to forge ahead.
Output from Iraq reached an all-time high of 3.5 barrels a day earlier this year and remains at a high level but output is hampered by a lack of export capacity made worse since a northern pipeline was blown up.
Map showing area in Iraq and Syria under Isis control as of 18 June 2014. Photograph: Graphic
The growing threat of civil war is unnerving residents in Kirkuk and Baghdad – but it should also worry consumers around the world. Iraq is one of the world's key oil producers, and until recently its growing crude exports had helped to keep global petrol prices from rising too high, .
The crisis caused by the sudden advance of the Isis insurgents has driven world crude prices past $114 a barrel in recent days and led to warnings of shortages from industry experts. Iraq has always been a major producer, but has increased its output in the past year, at a time when other exporting nations such as Nigeria and Libya have seen supplies reduced due to their own domestic problems.
Earlier this year, the Organisation of Petroleum Exporting Countries (Opec) predicted that 60% of the oil cartel's future production growth to the end of the decade will come from there. This now seems in doubt - at a time when global demand continues to grow as Europe moves out of recession and the economies of energy-hungry developing nations such as China and India continue to forge ahead.
Output from Iraq reached an all-time high of 3.5 barrels a day earlier this year and remains at a high level but output is hampered by a lack of export capacity made worse since a northern pipeline was blown up.
Map showing area in Iraq and Syria under Isis control as of 18 June 2014. Photograph: Graphic
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