Iraq's autonomous Kurdish region has halted oil exports, accusing the central government in Baghdad of failing to pay the oil companies working in the oil-rich area.
Kurdistan's Ministry of Natural Resources said Sunday that "there have been no payments for 10 months." But officials in Baghdad have said more than $500 million have been approved and is awaiting the final paperwork.
The friction between Baghdad and Kurdistan, autonomous since 1991 with its own government and armed forces, centers on control of oil fields and revenues in the north.
Iraqi lawmakers are still haggling over a national oil law that is meant to create a more solid legal framework for companies working in the OPEC nation.
Tensions between the Kurdish leadership and Baghdad have also been rising on the political front.
In December, Iraq's highest ranking Sunni official, Vice President Tareq al-Hashemi, fled to Kurdistan to avoid an arrest warrant. Baghdad's Shi'ite-led government has accused him of running death squads, a charge he denies. Kurdish officials have refused Baghdad's request to arrest Hashemi or hand him over.
In a move likely to exacerbate the tense situation, Hashemi left Iraq on Sunday for predominantly Sunni Qatar. He is expected to stay there for several days.