Militants Seize Iraqi Town Near Border With Jordan

June 23 (Bloomberg) -- Helima Croft, senior geopolitical strategist at Barclays, and Tobais Levkovich, chief U.S. equity strategist at Citigroup, examine the push by the ISIL in Iraq and how the violent unrest is impacting global oil markets. They speak on “Bloomberg Surveillance.”

Gunmen fighting Iraqi forces seized more territory along the country’s borders with Jordan and Syria, as President Barack Obama warned that advances by militants could spill over into neighboring countries.

Fighters from the Islamic State in Iraq and the Levant, an al-Qaeda breakaway group, took all the border crossings with Jordan and Syria, Hameed Ahmed Hashim, a member of the Anbar provincial council, said by telephone yesterday. Militants took Rutba, about 145 kilometers (90 miles) east of the Jordanian border, Faleh al-Issawi, the deputy chief of the council, said by phone. Anbar province in western Iraq borders both countries. The Jordanian army didn’t immediately respond to a request for information about the situation on the border.

Obama told CBS in an interview that will be aired in full today that the fighting could spread to “allies like Jordan.” The militants “are engaged in wars in Syria where -- in that vacuum that’s been created -- they could amass more arms, more resources,” the president said, according to a transcript.

Iraq’s crisis flared when ISIL fighters this month captured Mosul, the country’s biggest northern city, and advanced to towns just north of Baghdad as Iraqi forces struggled to halt their military gains.

Photographer: Karim Sahib/AFP via Getty Images

Iraqi Turkmen forces patrol a checkpoint in the northern city of Tuz Khurmatu, close to locations of the Islamic State in Iraq and the Levant fighters, on June 21, 2014. Close

Iraqi Turkmen forces patrol a checkpoint in the northern city of Tuz Khurmatu, close to... Read More

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Photographer: Karim Sahib/AFP via Getty Images

Iraqi Turkmen forces patrol a checkpoint in the northern city of Tuz Khurmatu, close to locations of the Islamic State in Iraq and the Levant fighters, on June 21, 2014.

Kerry Tour

The U.S., which withdrew its troops from Iraq three years ago, has put the onus on leaders including Shiite Prime Minister Nouri al-Maliki to form a more inclusive government. Maliki has been criticized for sidelining Iraq’s Sunni minority, some of whom have sided with ISIL over the army.

The pace of U.S. diplomacy is set to intensify with Secretary of State John Kerry arriving in the region.

The U.S. wants a government in Baghdad “that is prepared to represent all of the people of Iraq, that is prepared to be inclusive and share power,” Kerry said at a press conference in Cairo yesterday. Such a step would allow Iraq to “focus on the real danger” to the region, “which is ISIL.”

ISIL militants and Sunni supporters now control territory in Iraq from Mosul in the north to Rutba in the west. Rutba is located less than two hours by car from the Jordanian border on a highway running from Baghdad and is the last major town before crossing into Jordan.

Low Morale

“ISIL entered Rutba, and burned a police station and confiscated all police weapons,” al-Issawi said. “Morale is very low.”

The town’s capture is “significant because it could help them with the movement of supplies,” Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis in Dubai, said in a phone interview. “It secures routes along tribal lines that run between Jordan, Syria and Iraq.”

Photographer: Haidar Hamdani/AFP/Getty Images

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Photographer: Haidar Hamdani/AFP/Getty Images

ISIL also extended its control further north. The remaining Iraqi forces in Tal Afar, west of Mosul, withdrew into Kurdish-controlled territory, leaving the town in the hands of the militants, Jabar Yawar, an official in the Kurdish administration that runs part of northern Iraq, said by phone yesterday. ISIL took the town of Sharqat in Salahuddin province, about 200 miles north of Baghdad, after fierce fighting yesterday, Al-Jazeera television said.

The advances made by ISIL have edged the country closer to sectarian strife, raising fears of a reprise of the civil war in the years after the 2003 U.S. invasion.

Thousands of armed Shiite militiamen staged military-style parades on June 21 in cities including Baghdad, Basra, Najaf and Kut, according to footage on Al Arabiya television. In Baghdad, militiamen loyal to cleric Moqtada al-Sadr marched through the Shiite Sadr City district, Al Arabiya reported. Some wore military fatigues and carried weapons.

A picture taken on June 21, 2014 in the city of Ramadi, west of the capital Baghdad shows a devastated street following the fightings between the Sunni anti-Al-Qaeda militia Sahwa (Awakening) and anti-government militants, including from the jihadist Islamic State of Iraq and the Levant (ISIL) in the Anbar province. Photograph: AFP/Getty Images Close

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A picture taken on June 21, 2014 in the city of Ramadi, west of the capital Baghdad shows a devastated street following the fightings between the Sunni anti-Al-Qaeda militia Sahwa (Awakening) and anti-government militants, including from the jihadist Islamic State of Iraq and the Levant (ISIL) in the Anbar province. Photograph: AFP/Getty Images

Sistani Call

The possibility of an Iraqi government without Maliki gained credibility when the country’s top Shiite cleric, Grand Ayatollah Ali al-Sistani, last week called for an “effective” government “that can avoid previous mistakes.”

The Obama administration is prodding Iraqi politicians to form a government within weeks, short-circuiting the infighting and deal-making that have followed previous elections. Maliki’s party emerged as the largest in an April vote, without gaining a majority.

The U.S. invasion helped bring Iraq’s Shiite majority to power, alienating Sunnis who dominated the country during Saddam Hussein’s era. Shiite Muslims have political and religious ties to Iran, while the Sunnis have felt marginalized from the country’s political process under Maliki.

Sunni Muslims are a majority in Anbar province and in areas north of Baghdad. The Shiites are the majority in the south, which has been spared the fighting so far and is home to 60 percent of the country’s crude reserves, according to the U.S. Energy Information Administration.

Refinery Fight

The Sunni insurgents led by ISIL have engaged in a back-and-forth battle to control the Baiji oil refinery, the nation’s largest. Elite forces were protecting the refinery after foiling ISIL’s attack, state-sponsored al-Iraqiya television said June 21.

Crude oil shipments from southern Iraq have been mostly unaffected by the fighting. Kurds are defending the Kirkuk oilfield in the north, where exports have been halted since March by attacks on the pipeline. Iraq pumped 3.3 million barrels a day last month.

OPEC members will “collectively decide” how to cover any shortfall from a possible interruption of Iraqi supplies, U.A.E. Energy Minister Suhail Al-Mazrouei told reporters in Abu Dhabi yesterday.

Amid the Iraq unrest, Brent crude, which is used to price more than half of the world’s oil, recorded a second weekly gain, closing last week near a nine-month high at $114.81 a barrel.

‘Inclusive Agenda’

Obama has authorized the deployment of as many as 300 special operations advisers to Iraq, while stressing that the onus is on Iraqi leaders to resolve the crisis. The initial group of advisers arrived in Baghdad June 21, CNN reported, citing a senior defense official it didn’t identify.

Obama declined on June 19 to say that he continues to have confidence in Maliki, whose government the administration blames for inflaming sectarian tensions in OPEC’s second-largest oil producer.

“It’s not the place for the United States to choose Iraq’s leaders,” Obama said. “It is clear, though, that only leaders that can govern with an inclusive agenda are going to be able to truly bring the Iraqi people together and help them through this crisis.”

To contact the reporters on this story: Glen Carey in Riyadh at gcarey8@bloomberg.net; Khalid Al-Ansary in Baghdad at kalansary@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net Ben Holland, Glen Carey

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