The primary objective of this research is to isolate and distinguish indigenous fungal strains capable of breaking down hydrocarbons from soils contaminated with oil. This study encompasses various geographical sites within the oilfields of the Kurdistan Region of Iraq (KRI). The extracted DNA from the hypha was used for polymerase chain reaction (PCR) amplification using a universal primer (ITS1/ITS2). PCR product sequencing analyses were compared with the other related sequences in GenBank (NCBI) for molecular evolutionary analyses. Results showed that, out of 68 screened fungal strains, only two genera (i.e., Aspergillus spp. and Penicillium sp.) were identified as the most potent hydrocarbon degrading fungi. This was consistent with the highest hydrocarbon degradation percentage values (91.76% and 81.87%) calculated for Aspergillus spp. and Penicillium sp., respectively, after two months of bioremediation. DNA sequence analysis confirmed the validity of the species as A. fumigatus- KU321562.1, A. flavus-MH270609.1, A. niger-MK452260.1, and P. chrysogenum-MK696383.1. In conclusion, molecular techniques employed in fungal taxonomy provide a high degree of accuracy and enable identification that doesn’t depend on cultivation, relying on stable genetic markers. These markers furnish reliable and uniform data, granting researchers the ability to fine-tune the level of detail, thus proving indispensable for comprehending fungal diversity and a wide array of practical uses.