Turkish 'greed' responsible for Kurd oil row, says Iraq deputy PM

Turkey has been "driven by greed" Baghdad's top energy said on Sunday in the latest sign that the regional energy row over the sale of oil from Iraq's autonomous Kurdish region could be escalating.

Hussein al-Shahristani, the deputy prime minister responsible for energy affairs, made the statements in an interview with AFP, in what appears to be a significant ratcheting up of rhetoric.

Tension have been on the rise since January when the Kurdish region first began exporting its oil to Turkey independently of the central government. Last week, however, Kurdish authorities went even further when they tried to sell the oil directly from Turkish ports, in a show of economic independence that angered the central authority in Baghdad.

"We believe Turkey has been driven by greed to try to lay (its) hands on cheap Iraqi oil," Shahristani, a former oil minister, told AFP.

"They have facilitated this smuggling, and obviously this has undermined the relationship" between the two countries.

Speaking from his office in Baghdad's heavily fortified Green Zone, he continued: "We had reached a fairly good level of cooperation before Turkey's greed has taken over and allowed itself to help in smuggling Iraqi crude."

On Friday, Iraq took the matter to the ICC in order to stop Turkey’s state-owned pipeline company from many any unauthorised transfers or shipments and said it would be seeking financial damages of more than $250m.

"Turkish action has been extremely harmful to Iraq," Shahristani said. "It has undermined the economy, it has deprived the Iraqi people of revenues."

"This is a hostile action that no other neighbour has taken against Iraq."

"I call on the Turkish government to reconsider that position because of its potential damage of our bilateral relationship."

The interview comes days after a crude oil tanker, filled with oil from Iraq’s Kurdistan region, u-turned on its way to the United States, reportedly for lack of an American buyer.

The tanker contained some of the first crude to come out of the region's newly built pipeline into Turkey.

Since loading at the Turkish port of Ceyhan last week, the United Leadership set course for the US Gulf Coast, according to ship-tracking and market sources. However, the US State Department quickly condemned the move, and said that any oil deals that bypassed Baghdad, risked being slapped with legal suits despite the US having previously imported small quantities of Kurdish oil.

"We do not support the export or sale of oil absent the appropriate approval of the federal Iraqi government," a US State Department official said.

The dispute between Baghdad and Kurdish authorities centres around interpretations of Iraq's constitution, with both sides insisting they are behaving legally.