Iraq Crisis: Militants control '75 percent' of country's largest oil refinery

The White House has continued to emphasize that any military engagement remains contingent on the government in Baghdad enacting political reforms and ending sectarian tensions, which had been on the rise even before the Islamic State's incursion last week, with thousands killed since late last year.

Republicans have been critical of Obama's handling of Iraq, but Congress remains deeply divided over what steps the U.S. can take militarily.

Even lawmakers who voted in 2002 to give President George W. Bush the authority to use military force to oust Saddam Hussein have expressed doubts about the effectiveness of drone airstrikes and worry about Americans returning to the fight in a country split by sectarian violence.

“Where will it lead and will that be the beginning or the end?” Sen. Richard Shelby, R-Ala., said, when asked about possible U.S. airstrikes.

“We don't know that. This underlying conflict has been going on 1,500 years between the Shias and the Sunnis and their allies. And I think whatever we do, it's not going to go away.”

During the United States' eight-year presence in Iraq, American forces acted as a buffer between the two Islamic sects, albeit with limited success.

But U.S. forces fully withdrew at the end of 2011 when Washington and Baghdad could not reach an agreement to extend the American military presence there.

Iraq has the world's fifth-largest known crude oil reserves, with an estimated 143 billion barrels, according to the U.S. Energy Information Administration. It produced some 2.58 million barrels of oil day in May, according to the Oil Ministry.

The price of oil eased slightly Tuesday after the U.S. said it was deploying a small group of troops to Iraq, which helped soothe fears somewhat over the prospect of disruption to crude supplies. The attack on Beiji likely will affect trading Wednesday.