Oil Dispute Sharpens Baghdad-Kurd Tensions amid Deadlock

Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries, sits on enormous oil reserves, and revenues from the sector feed 90 percent of the federal government budget Safin HAMED AFP/File

Iraq's oil wealth is rekindling tensions between federal authorities and the autonomous Kurdish region, in a row that could compromise the lifeline industry and keep investors away, analysts say.

The long-simmering dispute came to a head in February -- at a time of political deadlock in Baghdad -- when the federal supreme court ordered Kurdistan to hand over oil extracted from its territories to the federal authorities.