The $100 million cargo on board the United Kalavrvta has become the focus of a long-standing dispute between Baghdad and the semi-autonomous region of Iraqi Kurdistan over the latter's right to produce and market its natural resources.

The dispute has now reached the U.S. courts.

In a complaint filed in Texas Monday, the Iraqi oil ministry claimed that the KRG "illegally misappropriated" the tanker's cargo and secured a warrant from the court to seize the oil if it is brought ashore in Texas.

But in a letter sent to the Texas court Tuesday, the KRG sought to address what it called "certain misrepresentations" by Iraq's oil ministry. The KRG maintains that it legally shipped and sold the oil currently held aboard the United Kalavrvta, 60 miles off the coast of Galveston, Texas. Its lawyers also argue in the letter that the U.S. court has no jurisdiction over what is essentially an Iraqi constitutional issue.

"The federal government of Iraq is trying to achieve in foreign courts and in the Iraqi supreme court what is denied to the federal government by the Iraqi constitution," the KRG's minister of natural resources Ashti Hawrami said in a statement on the government's website.

A lawyer for the KRG said Tuesday that it is also considering filing an ownership claim in the U.S. to establish its right to the oil.

Federal Magistrate Judge Nancy Johnson acknowledged during a hearing Tuesday that the dispute over the ownership of the oil didn't seem like a matter for U.S. courts, but she said the cargo could be brought to shore in the U.S. and held in escrow, or it could be sold and the proceeds held by the court until the matter is resolved.

The cargo is just one of four million-barrel shipments the KRG has loaded from Turkey since May, infuriating Baghdad which claims sole authority over Iraq's natural resources and sees the KRG's bid for economic autonomy as a dangerous threat to its authority.

However, the Kurds have struggled to sell the crude amid threats from Baghdad to punish buyers with legal action and exclusion from southern Iraq's substantial oil sales. The U.S., which favors a unified Iraq, has also warned buyers of the potential legal risks involved in buying the oil.

Still, for the KRG, achieving economic autonomy has become a top priority since the beginning of the year when Baghdad cut off its budget payments. According to KRG's letter to the Texas court, such action has deprived the region of around $7 billion since the beginning of the year.

"There is no merit whatsoever to the allegations of the Ministry of Oil; to the contrary, it is the federal government of Iraq that has acted wrongfully and that will have to answer to the KRG's substantial counter-claims," the letter said.