Oil prices surge after militants seize Iraqi cities

Anxiety is increasing over the possibility of disrupted production. We're in the gas-guzzling summer season, too.

By MSN Money Partner Jun 12, 2014 11:52AM
By Cassie Werber, The Wall Street Journal

Oil prices shot higher Thursday, after the seizure of two Iraqi cities by militants shook market confidence in the reliability of the country's crude exports.

The price of a barrel of Brent crude reached $112.29 on London's Intercontinental Exchange, just 10 cents below the 2014 high. U.S. WTI crude, traded on the New York Mercantile Exchange, rose above $106 a barrel for the first time since September 2013.

Although very little of Iraq's crude exports are yet affected by the attacks on Mosul and Tikrit, prices soared on concern that violence could spread south to where the vast majority of the country's production is concentrated.

"It's purely a fear-factor hitting right now," said Torbjorn Kjus, oil analyst at DNB Markets in Norway. "Right now it's $2 up, and it could easily go up more than that based on developments" such as a move of violence southward, he said.Credit: © Khalil Al-A'Nei/EPA

Caption: An Iraqi policeman inspects the site of a car bomb attack in Kirkuk city, northern Iraq, June 04, 2014

Iraq's Oil Minister Abdul Kareem Luaiby, speaking at a meeting of the Organization of the Petroleum Exporting Countries in Vienna on Wednesday, described Iraq's southern oil-producing sites that include the export terminal at Basra as "very, very safe."

Commerzbank analysts said Mr. Luaiby's statement "appears almost farcical" as the government in Baghdad increasingly appears to be losing control over wide areas of the country.

Iraq had its most productive postwar month in February, pumping 3.6 million barrels of oil every day. Now production is around 3.3 million-3.5 million barrels a day, according to analysts.

Exports from northern Iraq have been halted for months because of damage to the pipeline that runs to the Turkish port of Ceyhan, cutting off some 250,000 barrels a day.

The nascent flow of oil from Iraqi Kurdistan hasn't yet been affected, but volumes are small and subject to objections by Baghdad, which sees them as a breach of sovereignty.

—Sarah Kent and Emre Peker contributed to this article.

More from The Wall Street Journal


Jun 12, 2014 12:19PM
The US gets no oil from there.  The all knowing Gov. should stop exporting OUR oil, then the wall street wizards won't be able to run up the price.  It is all BS .  Remember 9-11  gas was $1.20. Were told to never forget so why have so many forgot what prices were then and how we have been getting reamed for 13 yrs. They sold OUR propane supply overseas this past yr and caused propane to rise to almost $5 gallon, in one of the coldest winters.  Start calling now your Reps. and demanding a national energy policy.
Jun 12, 2014 12:04PM
Iraq would be better off under Saddam. All the American loss of life there, all the billions of dollars spent will now be for NOTHING !! Another example of why the United States should tend to its own problems here at home and QUIT trying to "police" the rest of the damn world !!! We have NO BUSINESS in the middle east...NONE !!
 Global economics is the cause for this, Ross Perot warned you all of that sucking sound of jobs going overseas and producing more consumers in the world and now prices are going up and US employment is going down, just as he predicted. The fat cats in Washington knew this, so they sent in their media dog-of-war to make him look like an idiot.  Lesson: next time the media makes a candidate look like an idiot that candidate might be saying something important.
Jun 12, 2014 12:21PM
Enough is enough, time to spend our money here in the states. Protect our bourders, create jobs here, legalize marijuana. Screw these other 3rd world retards.
Jun 12, 2014 12:40PM
We should ditch OPEC an use ONLY oil from North America(US\Canada\Mexico). Drill..drill...Drill!    We need to leave these people in the middle east to their backward selves. They won't even fight for themselves and are not worthy of one more drop of superior American\Canadian\British blood. They are not worth even one more bullet ,rifle or pair of combat boots from the USA.
Jun 12, 2014 12:49PM
If anyone believes that anything other than greed is responsible for oil prices, they're kidding themselves.  The so-called world price is set by an illegal Arab cartel and the American companies go willingly along. Cars get much better mileage now and there is much more oil available because of discoveries in the U.S. and Canada.  More supply and lower consumption usually means lower prices, but not with oil, I wonder why ?
Jun 12, 2014 12:44PM
You ain't seen nothin yet !      Wait till these  ""REBELS""  LOL spread into Saudi  Arabia

$12.00 per gallon here we come

At least Obama will get his wish
Jun 12, 2014 12:30PM
There is always an excuse to push oil up. It's to the point and has been that oil shoots up simply for the possibility of something negative happening to supplies. It's actually quite predictable when prices will shoot up and drop. It's ridiculous and serves as nothing more than to rake in profits. And what a waste of time the Iraq war will have been if that government is overthrown and taken over.
Jun 12, 2014 12:57PM
How can any self-respecting man be a democrat?
Jun 12, 2014 12:32PM
I believe these are the minority people we were protecting for many many years. When will we learn to stop getting involved with the worlds problems.
Jun 12, 2014 12:51PM
LOL...MSN will take this down soon because of the anti obama posts. MSN loves obama so much. There is a nice fathers day fluff piece on him amongst all the celebrity articles.    No repest for MSN....obamas propaganda outfit.
Jun 12, 2014 1:34PM


What is abundantly clear is that the same scenario will continue to play out ad-infinitum. In our Federal government and our 'illustrious' bought-and-paid-for Congress we have one of the most corrupt, incompetent and incapable institutions on the planet. The government's collusion with the insatiable greed and avarice of Big Oil, The Big Banks, the Wall Street 'casino boys', the other Fortune 500 Corporations, their CEO's and the Wealthy / Elite creates a situation where the only thing the average American can do is to bend over, 'assume the position' and get poked in the posterior with yet another pointy projectile. Case closed.  Peace to all ~

Jun 12, 2014 1:25PM
Nice foreign policy legacy Obama- NOT! 

How many failures, incompetence, & criminal actions by this president will it take for congress to finally impeach him?  In 2008, Romney was right ! McCain was right. Cruz was right. ALL THE REPUBLICANS WERE RIGHT. Al Qaeda is stronger than ever, ripe with new leadership just itching for the chance to strike at the USA. And those boneheaded liberals (I think about 90 were 'in the loop') let 5 taliban COMMANDERS loose. Those 5 will have thousands under them to do anything those 5 wacko's tell them to. They're living in luxury while the Obama administration hides away Bergdahl out of embarrassment. If you think that these terrorist commanders are isolated from the rest of Al Qaeda, think again. Those commanders will be planning out the next few years of attacks against us. And when in sam hell do you release POW's if the war is still going on? Don't say they're not because this is the exact term used by that imbecil Obama. 
And how short sighted are those dimwits for not having started the Keystone Pipeline? I know that gas prices will not come down much but they could be at least stable for the next decade, not having to rely nearly as much on foreign oil. 
You can't fix stupid ! But you can impeach it !

Jun 12, 2014 12:55PM
Like BIG OIL needs an excuse to raise prices. Show me a day without violence in the wacked out Middle East.
Jun 12, 2014 2:02PM

Why do more than 300 million americans put up with the crap in Washington?  That baffles me.

Jun 12, 2014 12:53PM

Jun 12, 2014 2:06PM
Any blip in the mideast is as good an excuse as any to raise prices, no surprise there.

In Michigan, the most-used excuses outside of mideast unrest are:
1. Switching to summer-grade gas, good for 3 months of price increases
2. Switching to winter-grade gas, good for 3 months of price increases
3. Refinery maintenance at least twice, good for 2 months of price increases
4. Pipeline ruptured in a refinery in Illinois, good for 1 month of price increases
5. The other month could include hurricanes in the Gulf or miscellaneous issues
Jun 12, 2014 1:00PM
If a country in the middle east wants our blood and treasure they need to pay for it.

If they want us to spend trillions of tax payer dollars to fight their wars then they need to pay for it.

I would suggest 25% of their oil production FOREVER.

Jun 12, 2014 12:48PM
In the recent past it was said that the US needed to DRILL BABY DRILL. The story was, if we do drill we will be energy independent.

Clearly, the people who were pushing that agenda wee lying to us all along.

 We are now one of, if not, the largest producer of oil in the world and yet no energy independence in sight.

The Key Stone pipeline is another good example. Here we have a foreign country and company (Canadian) trying to sway public opinion on
letting them tear a stripe down the middle of our country to get their oil to the gulf.
Why?  so they can ship it overseas and make even more money.

They have left us with no choice but develop a source of renewable energy that can, hopefully, be used primarily in the US.
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