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Baghdad and Erbil struggle to agree on oil exports and salary payments
The negotiations are seen as key to resolving a long-running political and budgetary dispute that has strained ties between Baghdad and Erbil.
09.07.2025
By Dana Taib Menmy
Source:https://www.newarab.com/news/baghdad-erbil-oil-talks-stall-again-salary-crisis-deepens
Talks between Iraq's federal government and the Kurdistan Regional Government (KRG) on resuming oil exports to Turkey and disbursing public sector salaries ended without a breakthrough, prolonging a fiscal crisis that has left Kurdish civil servants unpaid for months.
The negotiations are seen as key to resolving a long-running political and budgetary dispute that has strained ties between Baghdad and Erbil. A deal is also necessary to restart crude flows through Turkey's Ceyhan port, halted since March 2023, and to implement Iraq's 2023–2025 federal budget.
A KRG delegation led by acting Natural Resources Minister Kamal Mohammed met federal officials in Baghdad on Sunday, seeking to unblock salary transfers and secure an agreement on oil exports. The delegation also included Cabinet Secretary Amanj Rahim and Coordination Department Head Abdulhakim Khusraw.
According to information obtained by The New Arab, the Iraqi Council of Ministers did not make any decisions during its recent session on Tuesday regarding oil and KRG salaries. Instead, a committee comprising the Ministers of Justice, Health, Finance, Planning, and Higher Education was established to review and harmonise the two proposals submitted by the federal government and the KRG concerning solutions for salaries, oil revenues, and taxation. This committee will examine both proposals and present its findings to the Council of Ministers.
Kurdish opposition MP Dara Sekaniani, a member of Iraq's parliamentary legal committee, said the problem lies not in the absence of a deal but in the failure to implement existing laws. "This subject does not need an agreement; it needs implementation of the laws and court decisions," he told TNA, accusing the KRG of failing to comply.
He cited letters from Deputy Prime Minister Fuad Hussein and the Finance Ministry urging the KRG to transfer all local revenues to the federal treasury and hand over 400,000 barrels of oil per day (bpd) to Iraq's State Oil Marketing Organisation (SOMO), as stipulated in the budget law.
TNA sought comment from Amanj Rahim, but he was unavailable at the time of publication.
Hussein, who is also Iraq's foreign minister, reportedly discussed the issue with a US official in Baghdad on Monday. He is said to have delivered a message from KDP leader Masoud Barzani warning that the party could withdraw from the political process and boycott elections if the deadlock continues.
The KDP holds 31 seats in parliament and three ministerial posts in Prime Minister Mohammed Shia al-Sudani's cabinet. Analysts are divided on whether the threat to withdraw is credible, given that rival parties such as the Patriotic Union of Kurdistan (PUK) are likely to remain.
Under the federal budget, the KRG is entitled to 12.67 percent of national spending in exchange for meeting its oil and revenue obligations. A preliminary deal was reached on 29 June to resume exports, but it has yet to be finalised.
Al-Sudani has reportedly told the KRG that he cannot authorise salary payments without approval from the ruling State Administration Coalition. The prime minister is running for re-election on an independent list and is wary of unilateral moves that could alienate his political base.
A central dispute involves the KRG’s retention of 120,000 bpd for domestic refining. Baghdad wants the full 400,000 bpd exported through federal channels, offering subsidised fuel in return—a proposal KRG officials are hesitant to accept, citing prior delivery failures.
Private refineries linked to KDP and PUK figures process the region's oil, buying it at symbolic rates and selling fuel at near-market prices. Petrol costs around 450 dinars per litre in Baghdad but nearly 1,000 in the Kurdistan Region.
The Iraq-Turkey pipeline remains shut due to legal issues, and new budget terms offering $16 per barrel to IOCs operating in the KRG have been rejected as unfeasible.
Despite a court order requiring Baghdad to pay KRG salaries regardless of political disputes, the finance ministry has linked payments to compliance with budget terms. The issue is now before Iraq's top court.
KRG employees have yet to receive May salaries, while federal workers are receiving July pay. Economic hardship, wage delays, and inflation have triggered protests in Sulaymaniyah, where recent demonstrations were met with arrests.
The KRG is entitled to 598 billion dinars monthly but receives only around 430 billion after deductions, far short of its payroll obligations.
With no agreement in sight, the stand-off is testing the strength of Iraq's federal system and deepening public frustration across the Iraqi Kurdistan Region.
The negotiations are seen as key to resolving a long-
09.07.2025
By Dana Taib Menmy
Source:https://www.newarab.com/news/baghdad-
Talks between Iraq's federal government and the Kurdistan Regional Government (KRG) on resuming oil exports to Turkey and disbursing public sector salaries ended without a breakthrough, prolonging a fiscal crisis that has left Kurdish civil servants unpaid for months.
The negotiations are seen as key to resolving a long-
A KRG delegation led by acting Natural Resources Minister Kamal Mohammed met federal officials in Baghdad on Sunday, seeking to unblock salary transfers and secure an agreement on oil exports. The delegation also included Cabinet Secretary Amanj Rahim and Coordination Department Head Abdulhakim Khusraw.
According to information obtained by The New Arab, the Iraqi Council of Ministers did not make any decisions during its recent session on Tuesday regarding oil and KRG salaries. Instead, a committee comprising the Ministers of Justice, Health, Finance, Planning, and Higher Education was established to review and harmonise the two proposals submitted by the federal government and the KRG concerning solutions for salaries, oil revenues, and taxation. This committee will examine both proposals and present its findings to the Council of Ministers.
Kurdish opposition MP Dara Sekaniani, a member of Iraq's parliamentary legal committee, said the problem lies not in the absence of a deal but in the failure to implement existing laws. "This subject does not need an agreement; it needs implementation of the laws and court decisions," he told TNA, accusing the KRG of failing to comply.
He cited letters from Deputy Prime Minister Fuad Hussein and the Finance Ministry urging the KRG to transfer all local revenues to the federal treasury and hand over 400,000 barrels of oil per day (bpd) to Iraq's State Oil Marketing Organisation (SOMO), as stipulated in the budget law.
TNA sought comment from Amanj Rahim, but he was unavailable at the time of publication.
Hussein, who is also Iraq's foreign minister, reportedly discussed the issue with a US official in Baghdad on Monday. He is said to have delivered a message from KDP leader Masoud Barzani warning that the party could withdraw from the political process and boycott elections if the deadlock continues.
The KDP holds 31 seats in parliament and three ministerial posts in Prime Minister Mohammed Shia al-
Under the federal budget, the KRG is entitled to 12.67 percent of national spending in exchange for meeting its oil and revenue obligations. A preliminary deal was reached on 29 June to resume exports, but it has yet to be finalised.
Al-
A central dispute involves the KRG’s retention of 120,000 bpd for domestic refining. Baghdad wants the full 400,000 bpd exported through federal channels, offering subsidised fuel in return—a proposal KRG officials are hesitant to accept, citing prior delivery failures.
Private refineries linked to KDP and PUK figures process the region's oil, buying it at symbolic rates and selling fuel at near-
The Iraq-
Despite a court order requiring Baghdad to pay KRG salaries regardless of political disputes, the finance ministry has linked payments to compliance with budget terms. The issue is now before Iraq's top court.
KRG employees have yet to receive May salaries, while federal workers are receiving July pay. Economic hardship, wage delays, and inflation have triggered protests in Sulaymaniyah, where recent demonstrations were met with arrests.
The KRG is entitled to 598 billion dinars monthly but receives only around 430 billion after deductions, far short of its payroll obligations.
With no agreement in sight, the stand-