BAI HASSAN — Iraqi forces Wednesday appeared poised to take full control of the oil fields in the disputed northern province of Kirkuk, dashing Kurdish hopes of creating a viable independent state.

Kurdish peshmerga forces withdrew without a fight after federal government troops and militia entered the city of Kirkuk and seized the provincial governor's office and key military bases in response to a Kurdish vote for independence last month.

The oil fields taken Tuesday accounted for more than 400,000 of the 650,000 barrels per day that the autonomous Kurdish region used to export in defiance of Baghdad.

Their loss deals a huge blow to its already dire finances and its dreams of economic self-sufficiency.

On Tuesday morning, Iraqi forces took down the Kurdish flags that had flown over the pumping stations of the Bai Hassan and Havana oil fields and raised the national flag, an AFP photographer said.

Kurdish technicians had halted production and fled on Monday evening as pro-government forces approached.

The last Kirkuk oil field still in Kurdish hands is the smaller Khurmala field, south of Arbil, which produces around 10,000 barrels per day.

Oil exports through Turkey — both from Kirkuk and from within the Kurdish autonomous region — make up a major portion of the autonomous Kurdish government's revenues.

Baghdad views them as a breach of the constitution, under which they are a federal responsibility.

The autonomous Kurdish region is suffering a crushing economic crisis after Baghdad severed its air links with the outside world and neighboring Iran closed its border to petrochemical exports.

Prime Minister Haider Al-Abadi said Tuesday the independence poll was now "a thing of the past".

"Central authority must be imposed everywhere in Iraq," he told a press conference. "I want to be fair with all citizens."

Iraqi President Fuad Masum blamed the independence poll for triggering Baghdad's operation.

"Holding a referendum on the Kurdistan region's independence from Iraq stirred grave disagreements between the central government and the government of Kurdistan," Masum, himself Kurdish, said in a televised address Tuesday.

That "led to federal security forces retaking direct control of Kirkuk," he said.

Global crude prices rose further early Wednesday on investor fears of output disruptions.

French geographer and Kurdistan specialist Cyril Roussel said the loss of the oil fields had slashed Kurdish finances by half.

"It spells the end of Kurdistan's economic self-sufficiency and of the dream of independence," he said.

He said that without the revenues from Kirkuk oil, the autonomous region would never have embarked on the Sept. 25 poll in which Kurds overwhelmingly backed independence.

"It was only after the annexation of the two Kirkuk fields in July 2014 that Kurdish president Massud Barzani started to talk of independence. Before, he spoke only of autonomy," Roussel said.

Kirkuk lies outside the autonomous region but is one of a string of historically Kurdish-majority territories that the Kurds aim to control, against the wishes of Baghdad.

Kurdish forces seized many such areas in 2014 when Iraqi army units disintegrated in the face of the militants' lightning advance.

But since entering Kirkuk city on Monday, government forces have advanced on those areas one by one.

Market trader Hassan Mohammed, from Sulaimaniyah, said he had "never felt so full of despair".

"The history of the Kurds in Iraq is full of setbacks, Kirkuk is a new one, a huge one," the 52-year-old said.

On Tuesday, troops and militia entered the Yazidi Kurdish town of Sinjar after peshmerga forces withdrew without a fight, the Hashed Al-Shaabi paramilitary force said.

Sinjar was the site of one of Daesh (the so-called IS) group's worst atrocities in August 2014, when it killed thousands of Yazidi men and abducted thousands of women and girls as sex slaves, helping trigger the US intervention against the militants. — AFP