Baghdad leaders are accusing Turkey of abetting an illegal fuel trade with Kurdistan, with potentially dire implications for future relations and investment.

Iraq warns Turkey as oil tension escalates

Iraq warns Turkey as oil tension escalates
The leader of Iraq's autonomous Kurdistan, Massoud Barzani (L) shakes hand with Turkish Prime Minister Recep Tayyip Erdogan prior to their meeting in Istanbul, on April 19, 2012. (STR/AFP/Getty Images)

Tense relations between Iraq and Turkey are worsening under the strain of an oil dispute between Baghdad and the semi-autonomous Kurdistan region.Iraq's Cabinet on Tuesday ordered the Foreign Minister to lodge a formal complaint with the U.N. Security Council against Turkey for violating Iraqi air space.The PKK, a Kurdish separatist guerilla group, has long used the un-policed, mountainous region along the Iraq-Turkey border as base from which it has launched attacks on the Turkish milit...

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