ERBIL, Kurdistan Region of Iraq – The Kurdistan Region’s Council of Ministers on Wednesday reiterated that Erbil has fulfilled all of its obligations toward resuming the Region’s oil exports, noting that once the process is restarted there will be “no excuses” in the way of Baghdad disbursing the Region’s financial entitlements. 

“The Kurdistan Region has more than fulfilled all of its commitments and has shown every leniency toward resuming the Region's oil exports through SOMO [Iraq’s State Organization for Marketing of Oil],” the council said in a statement following a cabinet meeting on Wednesday.

“With the resumption of oil exports, no excuses will remain in the way of disbursing the Region's financial entitlements by the federal finance ministry,” the statement added.

Exports of the Kurdistan Region’s oil through the Turkish Ceyhan pipeline were halted in March 2023 after Ankara lost a case against Baghdad in a Paris-based arbitration court. The case accused Ankara of breaching a 1973 agreement by allowing the KRG to start selling oil independently of Baghdad.

In a letter addressed to the KRG in late May, Iraqi Finance Minister Taif Sami said that Baghdad was “unable to continue funding the Region” for the rest of the year, arguing that Erbil has already exceeded its share of the annual budget.

Representatives from Erbil and Baghdad have engaged in fresh rounds of talks in both cities in recent days aimed at resolving the longstanding financial issues and making a final push toward the resumption of the Kurdistan Region’s oil exports —a move seen as the only step out of the crisis.

Spokesperson for the Kurdistan Regional Government (KRG) Peshawa Hawramani said earlier on Wednesday that funding the salaries of the Region’s employees by the federal government is contingent upon an agreement between international oil companies (IOCs) and Baghdad for the resumption of Erbil’s exports.
 
“The ball is now in Baghdad’s court,” Hawramani said. “The fate of one million employees awaits a signature,” from Iraq’s Prime Minister Mohammed Shia’ al-Sudani. Hawramani noted there were third parties involved in the recent meetings between Erbil and Baghdad, notably the US, who “wants the Kurdistan Region’s oil exports to resume.”

“All parties are waiting on the federal government's decision to approve the mutual understandings that have been reached between both sides in the presence of representatives of the oil companies,” the council’s statement added. 

Years of conflict and unresolved issues between Erbil and Baghdad, and economic sanctions and pressure on Erbil by federal authorities, have pushed employees in the Region to live from paycheck to paycheck.
 
The recent suspension of salaries has sparked outrage among the Kurdistan Region’s public as well as the officials and politicians of the Region, who have slammed the decision as “political.” Civil servants from the Kurdistan Region filed a complaint to the Iraqi Federal Supreme Court in early June, demanding uninterrupted funding of their salaries on their specified dates as per a previous ruling of the court.