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Washington CNN  — 

Iraqi security forces are “all but cut off” at the Baiji oil refinery by ISIS and now only control about 20 percent of the facility, a senior U.S. official tells CNN.

The refinery site, which has not operated for months, has been heavily contested. But ISIS fighters have successfully moved into several refinery areas in recent days, and are keeping the Iraqi forces from being re-supplied.

ISIS now controls ‘the majority” of the refinery the official said. While Iraqi forces have lost significant ground there in the last few days, the official described the battlefield situation as “highly contested” and said Iraqi forces have suffered steady losses leading to the current situation.

Iraqi forces include Army, national police and counterterrorism units at the site. If the Iraqis lose the refinery “they will have to find a way to re-take it,” the official said.

U.S. and coalition fighter jets have been able to strike ISIS fighting positions and supply routes around the refinery, but are not striking inside, the official said. The reason, in part, is to preserve as much of the infrastructure as possible for the future. But the official emphasized in key areas ISIS controls, U.S. airstrikes can only have a limited impact against ISIS which can move fighters into areas in small, not easy to find groups.

The refinery is considered strategic because it is key infrastructure and it is located on a major approach route to the city of Mosul, which Iraq forces hope to take back from ISIS in the coming months. However, the refinery has been non-operational for some time.