Militants with the Islamic State of Iraq and Syria took control over the Baiji oil refinery north of Baghdad. The refinery, which U.S. officials have said was closed weeks ago, processes oil largely for the domestic market.
The conflict in Iraq has put pressure on crude oil prices. U.S. motor club AAA attributed last week's rise in gasoline prices in the country to the conflict.
Jamie Webster, a research director at IHS Energy, said Wednesday there are far bigger prizes in Iraq than the Baiji refinery.
"To impact crude oil production or exports out of Iraq, ISIS will need to show a substantive shift in its attack focus, bypassing Baghdad and heading far south to attack key infrastructure," he said in a research note emailed to United Press International.
To move further south would be difficult for ISIS, he said. Much of the area it controls now in Iraq is Sunni, while southern provinces are largely controlled by Shiites.
In terms of global market conditions, Webster said there have been adjustments to the instability in Iraq, though the country is still producing oil.