Major conflict in the north of Iraq could significantly affect US industry practices.

After news that an American aircraft carrier was dispatched to the Persian Gulf, the international benchmark for oil prices hit above $114 a barrel for the first time in nine months. Militant activity pushing towards Baghdad and threats of civil war have many market experts expressing concern. 

"We've been waiting for the other shoe to drop in this tightly balanced market and now it's happened," Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, told Bloomberg in a phone interview. "There have been lurking risks but nobody was projecting how quickly things would turn worse."

West Texas Intermediate crude rose 63 cents, or 0.6 percent to $107.54 a barrel. Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, told Bloomberg that media headlines from Iraq will continue to affect the U.S. oil market, but that WTI is not expected to reach above $120.

Although growing domestic oil production in the U.S has cut the country's dependence on foreign oil, Iraq still plays an important role in market stability, Bloomberg reports. Many of the world's largest oil providers and manufacturers have significant holdings and investment in Iraq, and long-term disruptions in production due to unrest in the country would have a global impact. 

As of the time of reporting, conflict has been contained in the north of the country, which contributes roughly a quarter of Iraq's crude oil output. If fighting reaches the southern fields, analysts form Goldman Sachs Group Inc. predict a "significant impact on crude prices given current supply disruption in other OPEC members." 

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