Iraqi forces join battle

Iraq’s army fought Sunni Muslim militants for control of a northern town as it sought to turn round an guerrilla offensive that has raised concerns of a spiraling sectarian conflict.

There were conflicting reports on the fate of the town of Tal Afar, where a combined force of 8,500 U.S. and Iraqi soldiers declared victory against insurgents in 2005. Gunmen from the Islamic State in Iraq and the Levant, an al-Qaeda offshoot, captured most of the town, said Jabar Yawar, a spokesman for Kurdish forces positioned nearby. The military said it was nearing victory there, according to state-sponsored Iraqiya television.

Prime Minister Nouri al-Maliki, a Shiite, is fighting to reverse the advance of ISIL militants, who captured Iraq’s largest northern city and other towns last week. “We have regained the initiative and our forces are advancing against ISIL,” Maliki said in televised remarks today.

The mounting violence threatens to plunge one of the world’s largest oil producers into civil war and draw in outside powers from the U.S. to Iran to keep al-Maliki’s government from collapse. The unconfirmed execution of 1,700 people by militants, reminiscent of the bloodshed in Syria, has already been reported on jihadist forums and social-media sites.
 

Oil Markets
 

Global oil markets have been rattled by the instability in Iraq. West Texas Intermediate (NYMEX:CLN14) and Brent (NYMEX:SCN14) trimmed earlier gains amid speculation that oil production in Iraq would remain unaffected by escalating violence. WTI futures pared a gain of 0.6 percent in New York as Iraq’s military struck insurgent positions.

Secretary of State John Kerry said today that the U.S. was open to talks with Shiite Iran on the crisis if the government in Tehran was willing to play a constructive role. Kerry said he doubted reports that Iranian troops were already fighting to prop up Maliki’s government.

Iranian President Hassan Rouhani said on June 14 that while his country was willing to help Maliki, the Iraqi government hadn’t made an official request for aid.

An American official, who asked not to be identified because the issue is sensitive, said U.S. and Iran representatives may discuss Iraq on the sidelines of Vienna talks this week on the Islamic Republic’s nuclear program.

The U.S., which withdrew troops from Iraq in 2011 after eight years, has dispatched an aircraft carrier to the Persian Gulf as President Barack Obama weighs options to help Maliki repel the ISIL attacks.
 

Embassy Downsizing
 

The crisis prompted the U.S. to start reducing staff at its embassy in Baghdad while bolstering security, the State Department said in a statement. The U.S. Navy said it has dispatched the USS Mesa Verde, an amphibious transport dock ship carrying 550 Marines and five V-22 Osprey aircraft, to the Persian Gulf. The ship could be used if needed to evacuate U.S. personnel.

Saudi Arabia, the world’s largest oil supplier, said in its first public comment on events in neighboring Iraq that the tensions there were due to “sectarian policies” that threatened its “stability and sovereignty,” the official Saudi Press Agency said. Saudi Arabia’s cabinet warned against foreign intervention in Iraq and urged Iraqis to form a national unity government.

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