A spokesman for the company of Iraqi Oil Pipelines said on Tuesday that workers in the company in southern Iraq started on strike last Monday, demanding the government to improve financial compensation.
Faraj Mizban said that about 600 workers involved in the strike had closed the two main pipelines transporting refined oil products to Baghdad and southern cities.
Assem Jihad, spokesman of the Oil Ministry, confirmed the strike and said that it will have no impact on oil exports from southern Iraq.
He told Reuters that the workers started a strike in protest against the low annual return they receive, and added that the strike caused the cessation of the flow of oil products to the cities of Nasiriyah, Karbala and Baghdad.
Mizban indicated that the workers are demanding an increase in their share of annual profits from the company's branch in Basra, and to be financially and administratively independent from the center in Baghdad.
Basrah, the richest Iraqi city and its gate to the Gulf, is witnessing a conflict among Shiite factions that seek to control its oil wealth.
International companies are still waiting for the approval of a new energy law to regulate the distribution of oil wealth before they start pumping investments into the country.
Iraqi Prime Minister Nuri al-Maliki said in a statement that he would strike with an "iron fist" all those who are plotting to harm the interests of the country and that he ordered security forces to confront "saboteurs" firmly.
The struggle for power in Basrah, Iraq's second largest city, includes politicians and militias loyal to the young cleric Muqtada al-Sadr, Al-Fadhila Party, and the Supreme Islamic Council in Iraq.
Al-Fadhila Party, which enjoys strong influence in the city and controls the key oil positions in Basrah, opposes forming a large Shiite region, while the idea is supported by the Supreme Islamic Council, the largest Shiite faction in Iraq.
Hassan Jumaa, chairman of the General Syndicate of oil workers in Basrah, said that if the government refused to meet the workers demands they would expand the strike to include all oil installations in Basrah, including export and production.
But Assem Jihad, spokesman for the Oil Ministry, said that the oil pipeline's workers are unable to halt exports because they have no influence on the South Oil Company which is responsible for exports.