Exclusive: Iraqi Prime Minister Sets Deadline for Baghdad–Erbil Agreement on Oil & Revenues

Economy 03:34 PM - 2025-09-06

Iraq and Kurdistan flag and a oil extracting machine.

Iraqi Prime Minister Mohammed Shia’ Al Sudani issued a 72-hour deadline to the ministerial committees of the Iraqi federal government and the Kurdistan Regional Government (KRG) to reach a final agreement on outstanding disputes, particularly those relating to oil exports and non-oil revenues, 50% of which must be transferred to Baghdad monthly. 

A senior source within the Iraqi government confirmed to PUKMEDIA that, following numerous inconclusive meetings, PM Sudani has instructed both sides to resolve the issues within 72 hours.

The source stated: “After repeated meetings without tangible results, the Prime Minister has made it clear that the two sides must reach a settlement within the next three days. In my view, neither side’s committees show genuine intent to resolve the disputes. Baghdad is pressing demands upon the Kurdistan Region that are outside the framework of the constitution, while the KRG has failed to adhere fully to its obligations, particularly in relation to oil exports and the transfer of half its non-oil revenues.”

Disputes Over Financial Entitlements

The federal government has disbursed 5.8 trillion Iraqi dinars to the KRG in salary payments during the past eight months, while the KRG has transferred only 440 billion dinars of non-oil revenue. 

In reality, Baghdad should have allocated nearly 8 trillion dinars to the Region during this period, while Erbil should have handed over approximately 1 trillion dinars in non-oil revenues.

During recent cabinet sessions, some Iraqi ministers demanded that the KRG transfer 100% of its non-oil revenues to the federal treasury. However, Kurdish ministers rejected the proposal, citing the Financial Administration Law, which stipulates only 50% must be handed over. The ministers also noted that the KRG has yet to comply fully with this 50% requirement.

A Decisive Deadline

According to the source, the Prime Minister’s deadline represents a critical juncture.

“The two governments lack the will to reach a genuine agreement. If they fail to resolve these issues within the given timeframe, the disbursement of salaries for the remainder of the year may be jeopardised,” the source added.

Prospects for Oil Exports

Economist Nabil Marsumi wrote on social media that with Iraq’s oil production expected to rise in the coming months, it is imperative for Baghdad and Erbil to resolve their disputes swiftly and reach an understanding with Türkiye to resume pipeline exports.

“This would allow the Kurdistan Region and Kirkuk to legally export around half a million barrels of oil per day, which could help mitigate the current financial crisis facing Iraq,” Marsumi noted.

A Long-Standing Deadlock

The disputes between Baghdad and Erbil have persisted for more than three years, with no agreement reached on resuming oil exports. This ongoing deadlock has had direct consequences for public sector salaries in the Kurdistan Region.

In the past eight months, the federal government has transferred funds for only six salary payments, leaving the fate of two additional payments unresolved.



PUKMEDIA