The Islamist advance this week across northern Iraq has yet to have a major effect on the country’s oil exports, so why are world prices rising? Oil experts say the 4% price spike since June 6 — which has taken a barrel of crude to $107 for the first time since September 2013 — is being driven by fear that exports could be hit later this year, just as world demand peaks.
An al Qaeda splinter group occupied Iraq’s second biggest city, Mosul, earlier this week and has pushed on towards the capital, Baghdad. The group is trying to establish an Islamic state straddling the Iraq-Syria border.
Attacks by insurgents had already shut off exports from Iraq’s northern oil fields in early March, but it’s the threat they could post to exports from the south — the heart of the country’s oil industry — that’s worrying traders.