Iraq's federal court on Tuesday deemed an oil and gas law regulating the oil industry in Iraqi Kurdistan unconstitutional, according to Reuters.

Tuesday's court decision stated that the KRG must hand over all crude from the Kurdistan Region and neighboring areas to the Federal Government, represented by the oil ministry in Baghdad.

In a statement, the Parliament confirmed that the Federal Court's decision "violates the foundations of the federal system and the Iraqi constitution and is a severe blow to the Iraqi federal system, the governance process in Iraq, and the rights of citizenship."

The statement added that the Parliament of Kurdistan Region, "which represents the legislative authority of the region and is recognized in the Iraqi constitution, has the right to issue laws."

The Parliament stressed that this law is similar to a previous during Saddam Hussein's regime, noting that Article 112 of the Constitution confirms that the management of oil and gas files is common between Baghdad and Erbil.

"The Federal Court's decision contradicts its previous decision 8/2012, which confirms the partnership of Kurdistan and the oil-producing governorates in formulating strategic policy for oil and natural resources."

"The Kurdish Parliament established Law 22/2007, after despairing that the Iraqi Parliament had fulfilled its constitutional responsibilities in issuing the Federal Oil and Gas Law." The statement added.

The Kurdish legislative authority renewed its commitment "to the constitution and the protection of the country's public interests."

The Tuesday Iraq federal supreme court ruling declared KRG oil contracts with oil companies, foreign parties, and states invalid. According to the document, this includes exploration, extraction, export, and sale agreements.

The ruling also stated that the oil ministry must audit all agreements concluded by the KRG with oil and gas companies.

The Kurdish Regional Government (KRG) has been developing oil and gas resources independently of the Federal Government, and in 2007 enacted its own law that established the directives by which the Region would administer these resources.

KRG crude is exported through a pipeline that runs from Kirkuk to the Turkish port of Ceyhan.

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