Islamic State forces began a powerful counterattack Monday to retake the Iraqi town of Bayji, site of the nation’s largest oil refinery. The militants’ assault came as Iraqi and Syrian Kurdish fighters along with heavy U.S. airstrikes continued to pound the jihadist army in northern Iraq.

If the Islamic State eventually recaptures the refinery, which can produce around 40 percent of Iraq’s refined oil products, it would be a devastating blow both militarily and economically for the cash-strapped central government, which had hoped to begin gasoline production this month. In November, the Iraqi government pushed Islamic forces out of Bayji and the refinery.

In contrast, Kurdish peshmerga fighters took control of much of the town of Sinjar on Monday and continued to encircle Iraq’s second largest city, Mosul, which has been in militant hands since last June. The five-day-long offensive began as an effort to break a partial Islamic State siege of a mountain range north of Sinjar and, Kurdish officials say, it expanded as Islamic State forces withdrew to the cities of Tal Afar and Mosul amid constant air attack.[…]