The Dec. 17 seizure of Well No. 4 of the al-Fakkah field, some 50 yards inside territory claimed by Iraq, by a unit of the Iran's elite Revolutionary Guards raised tensions between the two countries, which fought a grueling war in 1980-88 that ended in stalemate.
The al-Fakkah field is about 200 miles southeast of Baghdad and contains the equivalent of around 1.5 billion barrels of oil.
It was not clear why Tehran chose to take such a provocative move at that time but it was probably related to Baghdad's award of 20-year production contracts for its major oil fields to international companies, with Tehran seeking to reassert its dominance lover the area's oil reserves.
The Iraqi government wants these companies to quadruple Iraq's oil output to 12 million barrels a day within six years. That would likely shake up the Organization of Petroleum Exporting Countries dominance of the global market and hit major producers such as Saudi Arabia and Iran.
Shiite Iran would like to get its hands on Iraq's oil, particularly the fields in the Shiite-dominated south that contain some two-thirds of known Iraqi reserves. Those total 115 billion barrels but industry experts say that as much again is believed to lie in untapped fields. If that proves to be correct, Iraq would overtake Saudi Arabia as the world's leading oil state.
If Iran took control of the southern fields it, rather than Iraq, would surpass Saudi Arabia, its Sunni-dominated regional rival.
The geopolitical consequences of that would be immense, giving Tehran control of a large portion of the world's oil supplies and the power and wealth that go with it.
Tehran withdrew its troops from Well No. 4, which is not producing oil, after a few days and called the incident "a misunderstanding." But Iraqi Vice President Tareq al-Hashemi insists that the well and the entire al-Fakkah field are "100 percent Iraqi property."
Iraqi Prime Minister Nouri al-Maliki, a Shiite with links to Tehran, was conspicuously silent throughout the al-Fakkah episode, particularly since he's running for re-election in March parliamentary polls.
Sunni lawmakers allege Iran is seeking to smother Iraq's drive to become a super-producer.
The al-Fakkah episode "is a continuation of their interference in the Iraqi affairs faced by an obvious government weakness," said one of the Sunnis, Saleh al-Mutlaq. He accused "some political parties which have alliances with Tehran."
Amir Tahiri, an author and Middle East expert who fled Iran in the 1970s, says many Iranians still do not recognize Iraq as a sovereign state.
"To them, Iraq is either 'Bayn al-Nahrayn,' (Mesopotamia) or 'Atabat al-Aliyat' (The Holy Shrines)," after the Shiite holy cities of Karbala and Najaf, which are more sacred than anywhere in Iran.
"Dominating Iraq has been an ambition of Iranian elites since the Ottomans drove Persia out in 1797."
"After the First World War and the disintegration of the Ottoman Empire, the Shiite clergy tried to persuade the Qajar Shah in Tehran to annex the holy cities of Iraq," he says.
"In the 1950s, an attempt to link the two countries through royal marriage failed when the shah's daughter, Princess Shahnaz, and Iraq's King Faisal failed to develop enough chemistry for the plot to succeed."
Tahiri observes that the fall of Saddam Hussein during the 2003 U.S. invasion "provided the Islamic Republic with a threat and an opportunity.
"The threat was that Iraq, the only country apart from Iran where Shiites are a majority, might become a modern democratic state and a rival for the Khomeinist model.
"The opportunity was for Iran to fill the vacuum left by the collapse of the Iraqi state, thus realizing the dream of dominating Iraq."
Following Saddam's downfall the Iranians have been extending their influence through Iraq's Shiite majority in the political, security and economic arenas.
This has accelerated as U.S. President Barack Obama gradually withdraws U.S. combat forces from Iraq.
Tahiri again: "The perception in Tehran is that the Obama administration is not as committed to Iraq today as the Truman administration was to West Germany in 1948. Thus, Iran is actively preparing to move in and fill the void."