The nonbinding referendum, in which the Kurds voted overwhelmingly in favor of independence from Iraq, was billed by the Kurdish leaders who spearheaded it as an exercise in self-determination that would set the region on the path to statehood — a dream central to Kurdish politics for decades.
Since Monday's vote, the crisis seems to have pushed Iraqi Kurds further away from the central government in Baghdad and alienated countries like Turkey and the United States, which have been key allies of the small, landlocked region.
Baghdad announced Thursday that Turkey — an indispensable trade partner to the region and once a key political ally — will now only deal with Iraq's central government on oil sales. That could deprive the Kurdish region of more than 80 percent of its income.
Iraq's government also has ordered international airlines to halt flights to and from the cities of Irbil and Sulaimaniyah starting Friday. Turkish President Recep Tayyip Erdogan urged Masoud Barzani, the leader of Iraq's Kurdish administration, to be content with the region's current semi-autonomous status, enjoy its oil revenue and not drag it into an "adventure that is bound to end in chagrin."
"Sit still! You are at the helm in northern Iraq, you have money, wealth and everything, you have oil," Erdogan said Thursday, speaking at a police academy graduation ceremony in Ankara. He said the region has "thrown itself into the fire" by holding the vote.
Erdogan's government had forged close ties to Iraq's Kurdish region but strongly opposes its moves toward independence, fearing it could inspire Turkey's own Kurdish minority. It has threatened military action and economic sanctions against the region.
Iraq's Kurds took their first steps toward autonomy with the backing of a no-fly zone enforced by the United States in the 1990s. In the fight against the Islamic State group, the U.S. launched the first airstrikes against the extremists to protect Irbil, and today the capital of the Kurdish region is still home to one of the largest bases for the U.S.-led coalition.
But Washington strongly opposed the referendum, fearing it would distract from the fight against the militants and lead to the disintegration of Iraq. Following the referendum, the U.S. said it was "deeply disappointed" in the vote, pledging its relationship with the region would not change, although adding that it is maintaining its support for a united Iraq.
One of the few countries to come out in favor of the vote was Israel, a state with few friends in the region. Newspapers in Baghdad and hard-line elements within the central government latched on to the news of Israel's support, dubbing the Kurdish region "a second Zionist entity."
A potential flashpoint in the standoff is the oil-rich city of Kirkuk. Iraqi Prime Minister Haider al-Abadi is under pressure to send troops to take it back from the Kurds, and Iraq's powerful largely Iranian-backed Shiite fighters known as the Popular Mobilization forces have said they are ready to move in on the city.
Brig. Gen. Hiwa Abdullah Bakir, a commander in the Kurdish forces known as the Peshmerga, said the security situation in the area has been normal, although his men have been on alert since the referendum.
"You saw the statements and harassments form al-Abadi on television," he said. "We think these are only threats, but we are prepared for anything." In Irbil, hundreds of passengers, many of them foreigners, boarded flights out of the Kurdish region Thursday.
Most international carriers who serve the Kurdish region said they would halt flights beginning Friday night in line with a ban issued by Baghdad following the referendum. Murat Mutlar, a Turkish citizen, said his employer in Irbil ordered him to leave before Friday; as of Thursday, he didn't know if he'll return.
"It depends on the situation here. If they make again all flights open ... we will come back again and continue our work," Mutlar said. The Kurdish region's economy is highly dependent on imports from Turkey and Iran. Since late 2013, the region has been unilaterally exporting crude oil produced in the region and contested areas through Turkey in defiance of Baghdad.
Kurdish officials have repeatedly descried their profits from such sales as central to their fight against the Islamic State group, claiming the money is being used for salaries of the Peshmerga. Iraqi Oil Report, an Iraq energy news service, estimates the region made $683 million a month in such oil sales in 2017.
"Everything has a price," said Baki Muhammed Hadi, a businessman in residential construction and imported electronics. "We are expecting to have bad days here, but to be honest, business has been bad here since Daesh entered this are," he said, using an acronym for the Islamic State group.
But, Hadi added, "trade and economy is like water, it goes up and comes down. Even if they close the official borders, trade and business will always find a way," he said, referencing the region's long history of smuggling.
Associated Press writers Salar Salim in Irbil, Iraq, Jon Gambrell in Dubai, United Arab Emirates, and Sinan Salaheddin in Baghdad contributed.