6-11-14 7:34 AM EDT | Email Article

By Ben Winkley

Iraq is descending into chaos, as the ripples of Syria's civil war spread across the region.

Mosul, Iraq's second city, fell quickly and dramatically to militants, and reports have them driving into the town of Baiji, home to Iraq's largest oil refinery.

Prime Minister Nouri al-Maliki has called for a state of emergency. The oil minister said Iraq's production is secure, but the main export pipeline to the Mediterranean runs straight past Mosul and has already been sabotaged more than 50 times in 2014.

Although the insurgency hasn't spread to Iraq's semiautonomous Kurdistan region, the tremors have the potential to halt its nascent oil-export industry.

This latest evidence of the disorganization that has beset Iraqi security forces since the U.S. military withdrew from the country in December 2011 comes just as Iraq's oil industry was getting back on its feet. In February production surged to its highest level in over 30 years, surprising skeptics of the country's efforts to restore its oil industry after decades of war and neglect.

(An expanded version of this report appears on WSJ:com http://blogs.wsj.com/moneybeat/2014/06/11/iraq-insurrection-spreads-into-oil-regions/.)

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-Ben Winkley; 415-439-6400; AskNewswires@dowjones.com

 

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(END) Dow Jones Newswires

06-11-14 0734ET

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