According to Iraqi media, the lawsuit was filed on Monday and accuses the U.S. government of allowing companies under its jurisdiction to sign oil exploration and production deals directly with the KRG. Baghdad argues these deals bypass the federal oil ministry and violate Iraq’s constitution, which states that oil is a national resource controlled by the central government.

The legal move comes just days after the Iraqi Ministry of Oil issued a sharp public statement warning that any foreign company operating independently in Kurdistan without federal approval is in breach of Iraqi law. The ministry specifically criticized U.S.-based firms, stating that Washington’s inaction on the matter constitutes tacit approval of unauthorized oil development in the region.

This legal escalation builds on a 2022 ruling by Iraq’s Federal Supreme Court that deemed Kurdish oil contracts illegal and demanded all crude sales and licensing agreements go through Baghdad. However, enforcement has been sporadic, and international companies have continued to operate in Kurdistan under contracts signed directly with the regional government.

U.S. energy firms have long viewed Kurdistan as an attractive investment zone due to favorable contract terms, security arrangements, and expedited approvals compared to the more bureaucratic and volatile central government. Despite Baghdad’s opposition, several of these firms have maintained operations in the north, shipping crude through Turkey and beyond Iraq’s federal export system.

There has been no immediate comment from the U.S. State Department or Department of Energy on the lawsuit or its potential diplomatic implications.