Erbil-Baghdad Salary Deal Nearing Finalization; Oil Export Mechanism Key to Agreement
KRG and Baghdad near deal to resume oil exports and release delayed salaries. A KRG delegation met with top Iraqi officials, including Oil Minister Abdul-Ghani. Baghdad may release May salaries this week; debt to oil firms and export terms remain key issues.
By Kamaran Aziz
ERBIL (Kurdistan 24) — The Kurdistan Regional Government (KRG) and the federal government in Baghdad are reportedly on the verge of reaching a pivotal agreement that could pave the way for the disbursement of delayed salaries to public sector employees in the Kurdistan Region as early as this week.
According to a well-informed source familiar with the high-level negotiations, a senior KRG delegation has been in Baghdad for three consecutive days holding crucial meetings with Iraqi government officials.
The source, speaking to Kurdistan24’s Dilan Barzan, stated: "A high-level KRG delegation has been in Baghdad for three days and has held a series of top-level meetings with Iraqi government officials. As of 1:00 PM today, Monday, June 30, 2025, the KRG delegation is scheduled to meet with Iraq’s Oil Minister, Hayan Abdul-Ghani, at the Council of Ministers."
One of the central issues under discussion is the mechanism for resuming oil exports from the Kurdistan Region, which were halted following a 2023 ruling by the Paris-based International Court of Arbitration.
The same source told Kurdistan24 that while "Erbil and Baghdad have reached a mechanism for exporting Kurdistan’s oil," several outstanding points of disagreement remain. Nonetheless, expectations are high that a comprehensive agreement will be reached during Monday’s meetings.
Under Iraq’s general budget law, the KRG is required to deliver 400,000 barrels of oil per day to Iraq’s state marketing company, SOMO. However, the current negotiations appear to have adjusted these terms.
The Kurdistan24 source noted: "About 280,000 barrels are to be delivered to SOMO daily, and the remaining 120,000 barrels are to be allocated for internal consumption by both Iraq and the Kurdistan Region."
A major hurdle yet to be resolved is the significant debt owed to oil-producing companies operating in the Kurdistan Region. This debt—estimated to be close to $1 billion—has become a critical issue following the aforementioned court ruling.
"This debt became a sticking point after a 2023 ruling by the Paris International Court. It is hoped that today’s meeting will also resolve this issue, as the companies are unwilling to resume oil exports without first being repaid," the source said.
Meanwhile, optimism remains high that the progress achieved thus far will translate into immediate economic relief for civil servants in the Kurdistan Region.
Sabah Sobhi, a member of the Iraqi Parliament’s Oil and Gas Committee, confirmed to Kurdistan24: "Tomorrow, Tuesday, July 1, 2025, the Iraqi Council of Ministers is scheduled to convene. It is expected that a decision will be made during the meeting to release the salaries of Kurdistan Region employees, with payment for the month of May to be issued by the end of this week."
The potential breakthrough comes after months of tension and repeated negotiations over oil revenue sharing, salary payments, and administrative control, which have strained relations between Erbil and Baghdad. If finalized, the agreement could mark a significant step forward in stabilizing financial relations between the two governments and alleviating public discontent in the Kurdistan Region.
Kurdistan24’s correspondent Dilan Barzan contributed to this report.
