Insurgents control the area around Iraq's largest refinery, although their attacks have been consistently repelled by elite Iraqi commandos and helicopter gunships.
While violence has taken Iraq's northern oil sector almost entirely offline, growing production and export capacity in the south is keeping Iraq afloat.
An Iranian ban on Kurdish crude and fuel exports eliminates a major route for companies to monetize production and threatens to further reduce KRG revenues.
Kurdistan's top ambassador says KRG territory now irreversibly includes the Kirkuk oil field, in a "new reality" of almost total Kurdish independence.
The Iraqi ambassador discusses stepped-up military cooperation with the U.S., the ongoing sectarian violence in Iraq, and the politics of government formation.
The integration of Kirkuk oil fields into Kurdistan's pipeline network promises to escalate tensions with Baghdad and raise difficult questions over how to manage oil flows and revenue.
When the Oil Ministry gave orders to dismantle a key pipeline, the Kurds took over the NOC's fields, and post-2003 relations between Baghdad and Erbil have never been worse.
Militants have begun selling thousands of barrels per day of oil stolen from Iraq's traumatized energy infrastructure.
A bilateral gas pipeline deal between Basra province and Iran could circumvent Baghdad's energy sector authority and conflict with UN sanctions.
The state-owned Turkish Energy Company now has a 20 percent stake in Exxon's six KRG blocks, giving Turkey a concrete interest in ensuring that oil can be sold by pipeline.