Rising Iraq-Erbil oil tensions lead to salary suspension

BAGHDAD

Tensions have escalated between Iraq’s central government in Baghdad and the semiautonomous Kurdistan Regional Government region in the north over oil revenue sharing.

Baghdad accuses Kurdish authorities of illegal deals and oil smuggling. It cut funding for public sector salaries in the Kurdish region before Eid al-Adha. Kurdish officials called it “collective punishment” and threatened retaliation.

The dispute began in 2014 when the Kurdish region started exporting oil independently via a pipeline to Türkiye’s Ceyhan port. Baghdad considers this illegal, filed a case in the International Court of Arbitration and stopped sending oil through the pipeline in March 2023 after the court ruled in Baghdad’s favor. Attempts to restart exports have stalled.

Last month, KRG Prime Minister Masrour Barzani signed two energy deals in Washington with U.S. companies. Baghdad sued the move, saying the deals were illegal without its approval.

Iraq’s Finance Ministry said the salary cut was due to the Kurdish region’s failure to transfer oil and non-oil revenues to the federal treasury as required by law. The Oil Ministry also accused Erbil of not delivering crude oil to the state company SOMO, causing billions in losses. Continued non-compliance threatens Iraq’s OPEC quota and international obligations.

Baghdad also accused Erbil of smuggling oil derivatives into Iran, tracking 240 cases since December 2024. The KRG’s Natural Resources Ministry, on the other hand, denied this, calling it a “smokescreen” and accused Baghdad of breaking the constitution and starving Kurds by halting salaries.

Barzani in a statement on the eve of the Eid al-Adha holiday described the withholding of salaries as an “unjust and oppressive decision” and a “policy of mass starvation” comparable to the chemical attacks and “genocide” launched by Iraq’s former longtime strongman ruler, Saddam Hussein, against the Kurds.