Iraq, oil markets, and the U.S. economy
Econobrowser (James_Hamilton) | June 15
To summarize, my view is that the U.S. economy is less vulnerable to an oil price shock than we were in 2007. Moreover what has happened on the ground so far in Iraq should not have major immediate implications for the price of oil.
But longer term, we may have just witnessed the creation of an important new power in the Middle East. Among other spoils, ISIS apparently seized $425 million from the Iraq central bank in Mosul. From ABC News:

Analysts say the financial and strategic spoils of ISIS’s capture of Mosul and Tikrit could provide a significant, nearly unstoppable boon to its Syrian arm, helping turn the tide in the months-long battle for Deir Ezzor.

So the immediate implications for the U.S. economy may turn out to be minor. After that? The world seems to be changing.

BP says oil price at its most stable since early 1970s
Financial Times | June 16
Despite jitters over Iraq, the price of oil is at its most stable since the early 1970s, as a huge increase in US oil production offsets massive disruptions to supply from places such as Libya, according to BP.
Christof Rühl, group chief economist, said the world had seen a cumulative 3m barrels a day of supply disruption since the start of the 2011 Arab uprising but that had been “cancelled out” by a similar extra amount of US production.

Better Get Used to Oil Craziness on Chaos in Iraq
Bloomberg | June 16
With Iraq forecast to account for 60 percent of OPEC’s increased production by the end of the decade, the threat is already creating ripples that could turn into breakers.
The Sunni rebels have control of Iraq’s biggest refinery, a 310,000 barrel-per-day facility in Baiji in the north. If the rebels continue their advance and seize regions in the south, where three-quarters of Iraq crude output is, the world’s oil supply is going to find trouble, Mark Shenk reported over the weekend. Saudi Arabia can’t increase production enough to make up for all of what’s expected from Iraq.
“A disruption of Iraqi supply would represent a global energy crisis,” John Kilduff, a partner at Again Capital, told Shenk. “This isn’t hyperbole.”

For Oil Prices, Uncertainty Is As Big A Threat As ISIS
Forbes.com (Michael Lynch) | June 14
No supplies are threatened beyond the 300 thousand barrels a day of imports from Iraq through Turkey, and it seems highly unlikely that extremists in other countries are going to rise up and attempt to join the caliphate that ISIS is trying to establish. Indeed, it may prove that ISIS is serving as the shock troops for the Iraqi Baathists, who would probably have few demands beyond autonomy or independence. Shock troops are very useful, but also very expendable. (In Napoleonic times, the British called them the “forlorn hope”.)
If ISIS and their allies take Baghdad, all bets are off, but this sees unlikely, nor does the possibility that they could endanger any oil supplies beyond the Iraqi borders. Thus, hoarding should not be expected to occur, which removes a significant pressure from the oil market. $150 a barrel remains a possibility, but would almost certainly depend on further military success by the militants.