
‘Oil-for-Salaries' Deal Ends Dispute Between Baghdad and Erbil
The deal, announced following an emergency cabinet meeting in Baghdad, covers oil production handover, non-oil revenue sharing, and the resumption of salary payments to KRG employees beginning with May 2025.
According to a government statement, the agreement was based on a recommendation by a ministerial committee and aligned with Kurdistan's regional cabinet decision No. 285, issued on July 16.
KRG Prime Minister Masrour Barzani confirmed the breakthrough, stating that the federal government had approved a 'mutual understanding regarding salaries and the region's financial entitlements.'
Under the terms of the deal, the KRG will hand over all crude oil production - currently 280,000 barrels per day (bpd) - to Iraq's State Oil Marketing Organization (SOMO), with the exception of 50,000 bpd reserved for domestic consumption. This marks the first such commitment in more than two years, during which oil exports were suspended amid ongoing disputes and recent drone strikes targeting northern oilfields operated mostly by US firms.
In return, the federal Ministry of Finance will pay $16 per barrel, in cash or in kind, to cover production costs. Revenues from locally consumed oil derivatives will go to the federal treasury after deducting production and transport expenses.
On non-oil revenues, the KRG will transfer an initial 120 billion Iraqi dinars (approx. $92 million) to the federal finance ministry, representing an estimate of Baghdad's share for May. A joint audit team from both governments will verify and finalize the figures within two weeks.
To resolve long-standing disputes over public salaries, a new joint committee will oversee the localization of KRG employee payrolls, in line with a ruling from the Federal Supreme Court. The committee is expected to complete its work within three months.
As part of the agreement's first phase, the federal government will begin disbursing May salaries following confirmation from SOMO that the agreed oil volumes have been received.
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Arab News
2 hours ago
- Arab News
US and EU strike deal with 15 percent tariff to avert trade war
TURNBERRY, Scotland: The US struck a framework trade agreement with the European Union on Sunday, imposing a 15 percent import tariff on most EU goods — half the threatened rate — and averting a bigger trade war between the two allies that account for almost a third of global trade. US President Donald Trump and European Commission President Ursula von der Leyen announced the deal at Trump's luxury golf course in western Scotland after an hour-long meeting that pushed the hard-fought deal over the line. 'I think this is the biggest deal ever made,' Trump told reporters, lauding EU plans to invest some $600 billion in the United States and dramatically increase its purchases of US energy and military equipment. Trump said the deal, which tops a $550 billion deal signed with Japan last week, would expand ties between the trans-Atlantic powers after years of what he called unfair treatment of US exporters. Von der Leyen, describing Trump as a tough negotiator, said the 15 percent tariff applied 'across the board,' later telling reporters it was 'the best we could get.' 'We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability,' she said. The deal, which Trump said calls for $750 billion of EU purchases of US energy in coming years and 'hundreds of billions of dollars' of arms purchases, likely spells good news for a host of EU companies, including Airbus, Mercedes-Benz and Novo Nordisk, if all the details hold. The baseline 15 percent tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal, though it is better than the threatened 30 percent rate. German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany's export-driven economy and its large auto sector hard. German carmakers, VW, Mercedes and BMW were some of the hardest hit by the 27.5 percent US tariff on car and parts imports now in place. But Bernd Lange, the German Social Democrat who heads the European Parliament's trade committee, said the tariffs were imbalanced and the hefty EU investment earmarked for the US would likely come at the bloc's own expense. Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments, a senior US administration official told reporters on Sunday evening. The euro rose around 0.2 percent against the dollar, sterling and yen within an hour of the deal's being announced. Mirror of Japan deal The deal mirrors key parts of the framework accord reached by the US with Japan, but like that deal, it leaves many questions open, including tariff rates on spirits, a highly charged topic for many on both sides of the Atlantic. Carsten Nickel, deputy director of research at Teneo, said it was 'merely a high-level, political agreement' that could not replace a carefully hammered out trade deal: 'This, in turn, creates the risk of different interpretations along the way, as seen immediately after the conclusion of the US-Japan deal.' 'We are agreeing that the tariff ... for automobiles and everything else will be a straight-across tariff of 15 percent,' Trump said, but he quickly added that a 50 percent US tariff on steel and aluminum will remain in place. Von der Leyen said that tariff would be cut and replaced with a quota system. Von der Leyen said the rate also applied to semiconductors and pharmaceuticals, and there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. Trump initially appeared to suggest pharmaceuticals would not be covered, but a senior administration official later confirmed to reporters that the tariff deal applied to pharmaceuticals. Officials also said EU leaders had accepted that the US would keep its 50 percent steel and aluminum tariff in place while the two sides continue to discuss it. 'We will keep working to add more products to this list,' von der Leyen said, adding that spirits were still under discussion. The deal will be sold as a triumph for Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, and has already reached similar framework accords with Britain, Japan, Indonesia and Vietnam, although his administration has not hit its goal of '90 deals in 90 days.' He has periodically railed against the EU, saying it was 'formed to screw the United States' on trade. Arriving in Scotland, Trump said the EU wanted 'to make a deal very badly' and said, as he met von der Leyen, that Europe had been 'very unfair to the United States.' Trump has fumed for years about the US merchandise trade deficit with the EU, which in 2024 reached $235 billion, according to US Census Bureau data. The EU points to the US surplus in services, which it says partially redresses the balance. Now he argues, his tariffs are bringing in 'hundreds of billions of dollars' of revenues for the US, while dismissing warnings from economists about the risk of inflation. On July 12, Trump threatened to apply a 30 percent tariff on imports from the EU starting on August 1, after weeks of negotiations with the major US trading partners failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros ($109 billion) of US goods in the event there was no deal, and Trump made good his 30 percent tariff threat. Some member states had also pushed for the bloc to use its most powerful trade weapon, the anti-coercion instrument, to target US services in the event of a no-deal.


Arab News
6 hours ago
- Arab News
Starmer has chance to right a historical wrong
Feverish debate over recent months has centered on whether the UK and France will recognize the state of Palestine. French President Emmanuel Macron said in February that recognition was 'not a taboo.' France and Saudi Arabia were due to hold a conference on the two-state solution in New York in June, but it was delayed by Israel's aggression against Iran. Instead, it is being held this week. But the UK's position has been far from clear? Will Prime Minister Keir Starmer agree to join in or will he delay? No country in the world has more of a history of grappling with the issue of Palestine than Britain. It was, after all, the author of the 1917 Balfour Declaration, in which it pledged support for a Jewish homeland in Palestine. It did not mention a second state in that declaration. London had to grapple with this as the mandatory power all the way up to 1947, when it handed the issue over to the newly formed UN to resolve. In November of that year, the UN General Assembly voted for partition. The UK abstained on that resolution. However, its exit from Palestine was one of the low points of its Middle Eastern colonial era. It made little or no attempt to thwart the war that started even before its troops had left. Palestinians argue that, given all this, Britain has a particular historic responsibility toward Palestine. It should, many argue, be in the vanguard of pushing for the creation of that second state. It was not until the Venice Declaration of 1980 that European powers including the UK committed to acknowledging the Palestinian right to self-government. Even after that, it was many years before Britain had any formal relationship with the Palestine Liberation Organization as the sole legitimate representative of the Palestinian people. Successive governments acted merely as backing vocalists to the US position on most aspects of the Palestinian question. With the Oslo Accords of 1993, the expectation that a peace process would lead to a Palestinian state grew. Britain and other donor states invested heavily in this option and aid to the fledgling Palestinian Authority grew as a result. It was all under the rubric that this would lead to a two-state solution, a secure Israel side by side with a state of Palestine based on the 1967 borders. The Palestinian leadership shifted its strategy after the Second Intifada to pushing for recognition. The UNGA approved the de facto recognition of the sovereign state of Palestine in 2012 and the state of Palestine also started applying for membership of international institutions, including the International Criminal Court. In 2014, the UK government's position was outlined by then-Foreign Secretary William Hague, who said that London 'reserves the right to recognize a Palestinian state bilaterally at the moment of our choosing and when it can best help bring about peace.' On Oct. 13, 2014, a debate took place in the House of Commons with a votable motion: 'That this House believes that the government should recognize the state of Palestine alongside the state of Israel.' The result of the vote was 274 to 12, a majority of 262 in favor of recognition. This was not binding on the government of the time but was a clear signal of parliamentary opinion. The low number of opponents to the motion indicated that few politicians were willing to oppose it in public. Significantly, this motion was backed by the leader of the Labour Party at the time, Ed Miliband. He said that recognition was 'right, just, fair and in line with the values' of his party. This tied Labour to supporting recognition. Contrary to widespread belief, it was not his pro-Palestinian successor, Jeremy Corbyn, who first made this move. Keir Starmer inherited this stance when he became Labour leader after the election defeat in 2019. But he made a significant change in Labour's position prior to the 2024 election. The manifesto committed the party to recognizing a Palestinian state, but only as part of a peace process. It stated: 'We are committed to recognizing a Palestinian state as a contribution to a renewed peace process which results in a two-state solution with a safe and secure Israel alongside a viable and sovereign Palestinian state.' The lack of clarity was deliberate. The decision on timing would be in the hands of the prime minister. As Israel's genocide has progressed, pressure has grown on European governments, including the UK, to get tough with Tel Aviv. Chris Doyle Debate endured as to whether these positions meant that Israel had veto power. Linking recognition to the state of a peace process, when the official Israel government policy was not to enter into negotiations, meant this was, in effect, exactly the case. Everything changed after Oct. 7, 2023. As Israel's genocide has progressed, pressure has grown on European governments, including the UK, to get tough with Tel Aviv. This has included a drive to recognize Palestine. In May 2024, Ireland, Norway and Spain recognized Palestine. Israel withdrew its ambassadors from those states. Larger European states such as the UK rejected the opportunity to join this move. This brings us to the present. Faced with Macron's announcement that France will recognize a Palestinian state in September, the focus returns to Starmer. He is facing considerable pressure to make the move immediately. Cabinet ministers are reported to have lobbied Starmer on recognition. They include Deputy Prime Minister Angela Rayner and Home Secretary Yvette Cooper. Foreign Secretary David Lammy is also likely to have been backing this move. Now, 221 members of Parliament from nine parties have written to Starmer expressing their support for such a move. More than 130 of these are his own Labour MPs. Others are backing this letter even now. London Mayor Sadiq Khan announced his support, as did the leader of Labour in Scotland, Anas Sarwar. The Financial Times quoted a senior Labour official as stating: 'The block on this is Keir himself as well as his senior advisers. They want to stay close to the US.' Public opinion is more supportive of recognition than opposed. Recent polls indicate a large number of 'don't knows' but, in a June survey, 64 percent of Labour voters said they believe that the UK should recognize Palestine. Only 2 percent of these voters opposed any recognition. This highlights that Starmer would have the backing of the base of his political party if he were to go ahead. What is holding Starmer back? The obvious answer is the US. Starmer is desperately keen to stay on constructive terms with American President Donald Trump. He will pick his battles with him — and it is unlikely one will be over the recognition of Palestine. There is also the issue of the hangover of the Corbyn era, when the Labour Party was swamped by accusations of antisemitism and lost considerable support within the British Jewish community. Starmer and his circle do not wish to relive that experience. Some argue that it is also Starmer's strongly held personal belief. Two arguments seem to hold sway in 10 Downing Street. Firstly, that recognition would not bring peace any closer. The second is the Israeli line that this rewards Hamas and its atrocities. The counterargument is that, far from rewarding Hamas, it is the Palestinian national movement that would be boosted. Is Starmer's position reversible? He has made U-turns on significant domestic policy, so it is possible. One argument is that if Starmer does not do this jointly with France, then in what circumstances would he do it? France would offer diplomatic cover and encourage other states to do the same. On the other hand, Starmer is in many ways already treating Palestine as a state in all but name. Back in May, he met with PA Prime Minister Mohammed Mustafa in Downing Street with both flags on display as if Mustafa was head of a state government. Would UK recognition even matter? Israel seems to think so, as does the US. This explains their forthright condemnation of any state that recognizes Palestine. Supporters of the move believe that this matters too. It would mean official recognition — decades too late perhaps — that Palestinians do have a right to self-determination, that they have national rights and that, just like Israelis, they have a right to a state of their own. Acquiring statehood would also have legal benefits for Palestinians. Any UK recognition would be largely symbolic. However, if the UK were to recognize Palestine, it would be recognizing a state under occupation. That matters because it demonstrates that this 58-year-old Israeli occupation has to end — and the failure to do so must have consequences.

Al Arabiya
8 hours ago
- Al Arabiya
Trump says EU and US have ‘reached a deal' on trade
US President Donald Trump said Sunday that he had reached a trade agreement with European Union chief Ursula von der Leyen. 'We have reached a deal. It's a good deal for everybody,' Trump told reporters after talks with von der Leyen at his golf resort in Turnberry, Scotland. The EU chief also hailed it as a 'good deal.'