Days of fighting between Iraqi soldiers and Islamic militants for control of the country's biggest refinery have left the price of global crude oil near a nine-month high Friday. The violence has already made gasoline more expensive in the U.S.
Iraq's government was desperately trying to hold off the extremists at the Beiji oil refinery and by late Thursday the two sides held different parts of the refinery, which extends over several square kilometers of desert some 155 miles north of Baghdad.
The facility has a capacity of 320,000 barrels a day, accounting for a quarter of Iraq's refining capacity. While all its output is used domestically, a prolonged shutdown could force the energy producer to import oil products to keep up with the country's needs, cutting into global supplies.
Urgent: Do You Approve Or Disapprove of President Obama's Job Performance? Vote Now in Urgent Poll
The price of U.S. benchmark crude for August delivery rose 2 cents to $106.07 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, slipped 12 cents to $114.94 a barrel in London, after setting a nine-month high the day before.
Violence in Iraq is helping to make gasoline in the U.S. more expensive, depriving drivers of the usual price break between Memorial Day and July Fourth.
Global oil prices have risen 5 percent since an insurgency took over two Iraqi cities. Any sustained increase in oil and gasoline prices can damp economic growth.
In the U.S., the average price of $3.68 per gallon is the highest price for this time of year since 2008, the year gasoline hit its all-time high. The good news is that gasoline is not likely to spike above $4 as it did 6 years ago, experts say. Or even cross $3.90, as in 2011 and 2012.
Gasoline prices typically fall in the weeks following Memorial Day, after supplies increase enough to fill up the cars of the nation's vacationers as summer approaches. Prices have declined during the previous three Junes, by an average of 21 cents per gallon, according to AAA.
This year, drivers are paying more. The average has risen every day for a week, and is now higher than it was on Memorial Day — with more increases sure to come.
Urgent: Assess Your Heart Attack Risk in Minutes. Click Here.