Iraqi Kurdistan is facing immense pressure after Iran announced on Saturday an embargo on exports and imports of fuel products to and from the region.
The move by a trilateral front consisting of Iran, Iraq and Turkey is aimed at isolating the Kurds following their controversial vote on independence last Monday.
It comes as Iraq's military prepared to take control over the Kurdish region's international borders and join Iranian forces in joint military exercises near the Iran-Kurdish border.
Iranian transport companies and drivers are ordered to stop carrying fuel products between Iran and Iraqi Kurdistan "until further notice" or face "consequences", the state broadcaster's website reported.
Tehran and Ankara fear the vote could lead to renewed conflict in the region.
On Saturday, Turkish President Recep Tayyip Erdogan claimed Israel's intelligence agency, Mossad, played a role in Iraqi Kurdistan's independence vote, saying people were seen waving Israeli flags during celebrations of the overwhelming "yes' vote,
"This shows one thing, that this administration (in northern Iraq) has a history with Mossad, they are hand-in-hand together," Mr Erdogan said.
Israel has been the only country to openly support an independent Kurdish state, with prime minister Benjamin Netanyahu backing "the legitimate efforts of the Kurdish people to attain a state of their own."
On Friday, Iraq instituted a flight ban that halted all international flights from servicing the Kurdish regions territory's airports.
Iraqi prime minister Haider Al Abadi said, "Any measure taken by the government will take into account the interests of the Kurdish people. The central government's control over border gates and seaports is not aimed at imposing any sort of siege on the Kurds."
The joint Iran-Iraq military exercises were announced by Tehran.
"The decision to hold the war games in the next few days was taken at a meeting of top Iranian military commanders which also agreed on measures to establish border security and receive Iraqi forces that are to be stationed at border posts," an Iranian military spokesman said.
The meeting restated "Iran's declared policies of respect for the integrity and preservation of the territorial integrity of Iraq".
Meanwhile, French president Emmanuel Macron invited Iraqi prime minister Haider AI Abadi to Paris on Thursday, saying France wanted to "help Iraq to stop tensions from setting in" following the vote on Monday, which saw Iraqi Kurdistan overwhelmingly support secession.
Mr Al Abadi's office, however, denied that was the purpose of the meeting, saying the invitation was first extended when French foreign minister Jean-Yves Le Drian and defence minister Florence Parly visited Baghdad on August 26, and President Macron had made no mention of "the need to recognise the rights of the Kurds or stopping an escalation by Baghdad."
On Friday, the US secretary of state, Rex Tillerson, said the United States government did not recognise the Kurdish referendum.
“The vote and the results lack legitimacy, and we continue to support a united, federal, democratic, and prosperous Iraq,” he said, urging all sides to "reject unilateral actions and the use of force."
The initial result announced by the Independent High Elections and Referendum Commission (IHERC) revealed 92.7 per cent of people had voted in favour of independence.