The Kurdistan Regional Government in April halted oil exports because it said Baghdad wasn't paying energy companies working in the Kurdish north.
Washington warned energy companies of risks associated with working in Iraq given political tensions between the KRG and Baghdad. Baghdad blacklisted companies for landing deals with the KRG, though exports from the Kurdish region have resumed.
Stuart Bowen, the U.S. special inspector general for Iraq reconstruction, said in a quarterly report that there was progress in settling issues surrounding exports and national hydrocarbon laws.
"Notwithstanding this progress, relations between the KRG and Baghdad remain tense," his report states.
Iraq has produced its highest level of crude oil -- more than 3 million barrels per day -- since 1990 and its economy has experienced double-digit growth.
Internal political differences continue to limit Iraq's potential, the inspector general said. Nevertheless, during the first nine months of 2012, the government received $62.8 billion in oil revenue, a 12 percent increase from 2011.