Baghdad orders Kurdistan Region to hand over all oil, ties salaries to compliance
The Iraqi Government has ordered the Kurdistan Regional Government (KRG) to immediately hand over all oil produced in the region to the state oil marketing company SOMO, linking salary payments to compliance with the mandate.
The decision, issued by the Council of Ministers on Thursday, is a part of a new framework to settle long-standing disputes over oil revenues, budget allocations, and public employee salaries between Baghdad and Erbil.
Under the new arrangement, the KRG must deliver a minimum of 230,000 barrels per day to SOMO for export, with any increase in production to be included. The Iraqi Ministry of Finance will, in turn, disburse an advance of $16 per barrel—either in cash or in kind—for the quantities received, in line with the amended federal budget law.
If exports are halted for any reason, the Kurdistan Region is required to deliver the same amount directly to the federal Ministry of Oil.
The remaining 50,000 barrels per day produced in the Kurdistan Region will be used for local consumption. The KRG is responsible for covering production and transport costs for this portion, while revenues from refined product sales must be transferred to the federal treasury after deductions. The Ministry of Oil will also supply the region with refined fuel equivalent to 15,000 barrels of crude per day if needed, based on a joint assessment due within two weeks.
Non-Oil Revenue Audit And Salary Localization
The Cabinet also mandated the KRG to transfer an initial payment of 120 billion Iraqi dinars from non-oil revenues for May. A joint audit team from Baghdad and Erbil will review and classify these revenues, beginning with May 2025, and submit findings within two weeks to determine the federal government's share.
A separate joint committee will finalize the localization of public sector salaries in the Kurdistan Region within three months, in line with a Federal Supreme Court ruling. Federal funding for these salaries will be granted only once the localization is completed.
Another team will examine whether the Kurdistan Region exceeded its authorized spending share under the 2023–2025 federal budget and will recommend corrective measures. This report is also due within two weeks.
First Salary Payment Conditioned On Oil Transfer
The Ministry of Finance will begin disbursing May salaries for the Region's employees only after the Ministry of Oil confirms receipt of the full daily quota—currently 230,000 barrels—via SOMO at the port of Ceyhan in Turkiye.
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