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The Kurds withdrew without a fight after federal government troops and militia seized the provincial governor's office and key military bases and oil fields as tensions boiled over following a Kurdish vote for independence last month.
The fields accounted for around 250,000 barrels per day of the 650,000 bpd that the autonomous Kurdish region exported under its own auspices, outside the purview of Baghdad, and their loss is a major blow to its revenues.
The regional government took over the two fields in 2014 when federal troops withdrew in the face of the jihadists' lightning advance through areas north and west of Baghdad.
The autonomous Kurdish region is already going through its worst economic crisis after Baghdad severed its air links to the outside world and neighbouring Iran closed its border to trade in oil products.