ALSO READOil jumps 1%; fighting shuts crude output in Iraq's Kirkuk Oil near 26-month high as Turkey threatens to cut supply from Kurdish area Oil prices climb on escalating conflict in Iraq, new US sanctions Oil falls below $56; Brent posts biggest third-quarter increase since 2004 Oil prices fall on rising US crude stocks, Opec's output bump
Iraqi forces took control of the two largest oil fields in the disputed northern province of Kirkuk today dealing a heavy blow to the finances of the autonomous Kurdish government.
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.
"Federal police units took control of the Bai Hassan and Havana oil fields," north of the city of Kirkuk, a statement said.
Kurdish technicians had halted operations at the two fields and left the wells on Monday, an oil ministry official in Baghdad said.
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.
Kirkuk lies outside the autonomous region but forms part of a swathe of historically Kurdish-majority territory that the Kurds want to incorporate in it against the wishes of Baghdad.