Iraq's government has ordered Iranian troops to withdraw from the oilfield which they have taken control of in southern Iraq, Reuters reported.
"Iraq demands the immediate withdrawal from well No. 4 and the Fakka oilfield, which belongs to Iraq. Iraq is looking for a peaceful and diplomatic settlement to this issue," said government spokesman Ali al-Dabbagh, according to Reuters.
Iranian troops crossed into Iraqi territory Thursday and seized an oil well that lies in a disputed area along the two countries' southern border, Iraq's deputy foreign minister said Friday.
Iran denied these claims, Reuters reported.
The Iraqi official, Mohammed Haj Mahmoud, said Iranian troops seized oil well No. 4 Thursday night in the al-Fakkah oil field, located about 200 miles southeast of Baghdad. The oil field is one of Iraq's largest.
The deputy foreign minister said he did not know whether the Iranians were still in control of the oil well.
In Washington, a U.S. official said that although Iranians had crossed the border before, they had not previously ventured this far.
Iraqi security forces were in the area, but there are no reports of any fighting or that any shots were fired, he said on condition of anonymity because he was not authorized to speak on the record.
No U.S. troops were in the area. And the Iranians are believed to have left the area, he said.
A message left for Iran's Foreign Ministry spokesman seeking comment was not returned Friday evening.
According to Iraq's state-run Iraqiya television, the National Security Council, headed by Prime Minister Nouri al-Maliki, was meeting Friday night to discuss the issue.
Such incidents have happened before along the Iran-Iraq border, which was never clearly delineated after the brutal war between the two countries in the 1980s.
An energy expert in Washington with knowledge of the situation told Fox News that the field that Iran reportedly moved into is part of the Maysan group of fields, slivers of which have been disputed for a long time, some as far back as the Iran-Iraq war. The expert did not think this incident would blow up into something more serious in the short term.
Meanwhile, oil prices in the region rose slightly after news of the incident.
"We are coordinating with the Oil Ministry regarding this issue. This is not the first time that the Iranians have tried to prevent Iraqis from investing in oil fields in border areas. Tomorrow, we might summon the Iranian ambassador to discuss this issue," Mahmoud told The Associated Press.
The al-Fakkah field is considered a shared field between Iran and Iraq, meaning both nations are able to pump oil from it, but the Iraqis consider oil well No. 4 theirs.
Last year, the Iraqi Oil Ministry accused Iran of stealing oil from the al-Fakkah field and of illegally seizing and capping off wells in a second field that Iraq claims lies entirely within its territory.
Iraq has an estimated 115 billion barrels of proven oil reserves — the world's third largest, behind only Saudi Arabia and Iran.
But years of neglect, war and insurgency have left the oil fields performing far below what they're capable of. Iraq has been trying to attract international investment to develop its oil industry, including a round of international bidding last week that produced seven deals on the 15 fields offered. The al-Fakkah field was not one of those fields.
Fox News' Amy Kellogg and The Associated Press contributed to this report.