Ankara has condemned a deal entailing oil extraction, processing and trade between Delta Crescent Energy and the PYD/YPG-linked SDF in Syria, saying it is equivalent to financing terrorism.
Turkey has blasted an agreement between a terror group in Syria's northeast and a US oil company as "unacceptable", labelling it as terror financing.
Senior Washington officials confirmed that Delta Crescent Energy LLC, a US oil company, signed an agreement with the Syrian Democratic Forces (SDF) to "modernise" oil fields under its control. The deal entails oil extraction, processing and trade.
"We deeply regret the US support to this step, disregarding international law, violating territorial integrity, unity and sovereignty of Syria, as well as being considered within the scope of financing terrorism," Turkey's Foreign Ministry said on Monday.
"This act, which cannot be justified by any legitimate motive, is utterly unacceptable," the ministry's written statement said.
The US backs the SDF militia in Syria which is dominated by the PYD/YPG. The YPG is the Syrian offshoot of the PKK which is recognised by Turkey, the US and the EU as a terrorist organisation.
The SDF controls the country's biggest oilfields.
The Syrian regime condemned the deal as "theft" and an "affront to (its) national sovereignty" on Sunday.
The Turkish Foreign Ministry accused the YPG-led Syrian militia of advancing "its separatist agenda by confiscating, with this step, Syrian people's natural resources."
"Syria's natural resources belong to Syrian people," it added.
Washington has refrained from labelling the YPG a terror group as the US continues to rely heavily on it as its primary partner in northeastern Syria despite Ankara's objections.
READ MORE: How does the PKK-YPG raise funds in Syria?
US support for YPG
US Republican Senator Lindsey Graham told Congress on Thursday that he had spoken to the SDF leader known as Mazloum Kobani about the deal.
Asked by Graham if the US was supportive of the deal, Secretary of State Mike Pompeo said: "We are."
Kobani, whose real name is Ferhat Abdi Sahin, is one of Turkey’s most wanted men.
The US support for YPG in Syria has become one of the stumbling blocks in bilateral ties between the two NATO allies.
The Turkish military has launched three incursions into Syria to fight Daesh and the PKK/YPG.