The Iraq Kurdish oil agreement advanced as Prime Minister Mohammed Shia Al-Sudani’s Cabinet approved decisive measures to resolve disputes. This move strengthens Baghdad’s authority over oil exports and improves financial coordination with the Kurdistan Regional Government (KRG).
Under the Iraq Kurdish oil agreement, Kurdistan’s oil must flow directly to Iraq’s State Oil Marketing Organization (SOMO) for export. The KRG will receive $16 per barrel in cash or in-kind for delivering at least 230,000 barrels daily. Any additional production will follow the same terms, ensuring consistency in management and revenue sharing.
Currently, Kurdistan produces 280,000 barrels per day. Of this, 50,000 barrels serve local consumption within the region. The remaining 230,000 barrels, along with future increases, will be sent to SOMO. If exports face interruptions, the KRG must deliver the entire quantity to the Federal Ministry of Oil instead.
The Iraq Kurdish oil agreement also requires the KRG to handle production and transport costs for the 50,000 barrels allocated locally. It will transfer revenues from refined product sales to the federal treasury after deducting those expenses. This system creates financial accountability and prevents misuse of funds.
The Cabinet introduced several financial measures alongside the oil policies. The KRG must send 120 billion Iraqi dinars as a preliminary estimate of its non-oil revenue share. A joint auditing team will start verifying and classifying these revenues to increase transparency between Baghdad and Erbil.
A new committee will supervise salary localisation for KRG employees within three months, following a federal court ruling. Another team will monitor any overspending beyond the KRG’s allocated budget share for 2023-2025. These actions aim to enforce budget discipline and align spending with national priorities.
Baghdad also tied May salary disbursements for KRG employees to oil delivery compliance. Salaries will be released only after SOMO confirms the receipt of 230,000 barrels daily through the Ceyhan terminal. This approach ensures that oil flows translate into timely employee payments.
Nevertheless, these measures took effect immediately. They demonstrate Iraq’s determination to manage its energy resources effectively and maintain unity between Baghdad and Erbil. By addressing oil and financial issues simultaneously, Iraq strengthens national stability and prevents further disputes.
