Peregraf
Iraqi Foreign Minister and Deputy Prime Minister Fuad Hussein announced on Saturday that talks between the federal government and the Kurdistan Regional Government (KRG) over non-oil revenues and oil export mechanisms are showing positive momentum. He expressed confidence that joint committees will conclude their reports by Tuesday, paving the way for a full agreement.
“There is a rapprochement between the KRG and the federal government on the issues of non-oil revenues and oil,” Hussein told reporters. “As far as non-oil revenues are concerned, both sides have made a lot of progress. I think we will reach an understanding these days.”
Acknowledging the complexity of the dispute, he added, “The problem is not between the KRG and the oil companies or the federal government and the oil companies. The problem is tripartite… They will reach an agreement these days to have a tripartite understanding.”
Hussein stated that the joint committees are expected to finish their work by Tuesday, and that their reports will be submitted to the Cabinet for a decision—crucially linked to the long-awaited payment of overdue salaries.
Under a federal Cabinet decision, the transfer of public sector salaries to the KRG—which many employees have gone without since July—is contingent on the delivery of both oil and non-oil revenues under the Baghdad-Erbil revenue-sharing deal.
The Oil Export Freeze and Its Realities
Oil exports from the Kurdistan Region and Kirkuk to Turkey have been suspended since March 25, 2023, after a Paris arbitration tribunal ruled in Iraq’s favor, halting independent Kurdish exports via the Ceyhan port. This stoppage has inflicted severe economic strain: Peregraf estimates losses have now exceeded $28 billion, and other sources suggest combined losses across Baghdad and Erbil could top $50 billion.
Frequent efforts to restart exports—including multi-party meetings in March and mid-August—initially failed due to disputes over debt repayment, export oversight, and contractual guarantees. However, a breakthrough agreement was signed on August 11, enabling exports to resume with new terms: the KRG keeps 50,000 barrels per day for its own use, while the rest is transferred to Iraq’s State Oil Marketing Organization (SOMO) for export.
Despite this, the road ahead remains rocky. Oil production in the region is recovering from July’s drone attacks that slashed output by over 70%, but international oil companies continue to demand assurances on cost recovery, arrears, and long-term export guarantees.
Without renewed exports and reliable budgets, KRG public sector workers remain in limbo: some are receiving June salaries only now in September. Future agreements on oil and non-oil revenue flows are seen as the key to restoring financial stability and preventing further hardship for ordinary citizens.