Iranian soldiers have crossed into Iraqi territory and taken up position at a southern oilfield whose ownership is disputed by Iran, an Iraqi official said on Friday. Deputy Interior Minister Ahmed Ali al-Khafaji, reversing statements made earlier in the day, said the incursion on Friday was the latest in a series this week.
"At 3:30 this afternoon, 11 Iranian (soldiers) infiltrated the Iran-Iraq border and took control of the oil well. They raised the Iranian flag, and they are still there until this moment," he told Reuters.
He said the Iraqi government had taken no military action but stressed it would seek a measured, diplomatic response to the situation. "We are awaiting orders from our leader."
"There has been no violence related to this incident and we trust this will be resolved through peaceful diplomacy between the governments of Iraq and Iran," a U.S. military spokesman had told AFP earlier this morning at Contingency Operating Base Adder, just outside the southern Iraqi city of Nasiriyah.
"The oil field is in disputed territory in between Iranian and Iraqi border forts," he said, adding that such incidents occur quite frequently.
Reports initially denied
However, Iraq's Deputy Interior Minister Ahmed Ali al-Khafaji initially said no incursion took place.
"This news in not true. This field is disputed and now it is neglected by both sides. There was no storming of the field, it's empty, it's abandoned, it is exactly on the border between Iraq and Iran," he told Reuters.
U.S. crude for January delivery hit a high of $74.32 on the reports, before falling back.
Initial reports
According to Arabic-language television reports, Iranian troops entered the Iraqi field and raised an Iranian flag.
Jawad al-Bolani, speaking on al-Arabiya television, said the Iraqi government would make an additional statement on events at al-Fakka.
"Iraq will not give up its oil wealth, no matter the reason," he told the al-Arabiya news channel. He did not say when the government might make the statement.
An official at the Maysan Oil Company, which runs fields in the province, declined to comment. Iraq's defence and oil ministries were not immediately available for comment.
Ties between Iran and Iraq, which fought an eight-year war in the 1980s, have improved since a Shi'ite Muslim-led government took over in Baghdad following the ouster of Saddam Hussein in 2003.
The relationship is more delicate given the presence of 115,000 U.S. soldiers in Iraq.
Together with Bazargan and Abu Gharab, al-Fakka makes up the so-called Maysan Fields that have an estimated 2.463 billion barrels of reserves.


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