Gas stations in surrounding communities have run dry. One police chief ordered his men to stop patrols to conserve fuel. Similar stories abound, The Washington Post (NYSE:WPO) says.

Authorities in Baiji, a town north of Baghdad that's home to Iraq's largest refinery, have confirmed that the refinery has been closed since Dec. 21.

Apparently hoping to pick a cause popular with Iraqis, insurgents launched their offensive on gas stations this month after Iraq raised fuel prices eightfold.

Meanwhile, U.S. and other international mediators hoped to stave off an early crisis in Iraq's efforts to assemble a new government by appointing a multinational team to investigate complaints of fraud in Dec. 15 national elections.

Sunni Arab and secular parties had said they would boycott coalition government talks without such an investigation.