The Islamic State of Iraq and the Levant Sunni Muslim rebels have besieged the refinery for ten days but several attempts to enter the complex were fought back, the BBC reports.
The Baiji refinery accounts for a third of Iraq's fuel and the fighting has already resulted in petrol rationing.
Friday's Brent Blend price was the highest for 10 months — almost 115 dollars a barrel.The price fell a little on Monday and Tuesday, but still reached a record-high for customers in the Stavanger region, Monday.
Nordea oil analyst Thina Saltvedt has warned of raised oil and petrol prices as a result of unrest in Iraq.
She thinks this is just the beginning, however, and that prices will increase even further in times to come.
Iraq's oil production accounts for about 3.7 per cent of the world's oil production.