‘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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Asharq Al-Awsat
an hour ago
- Asharq Al-Awsat
Iraqi Police Clash with PMF Fighters Who Stormed Government Building
A gun battle erupted in Iraq's capital on Sunday between police and fighters from the state-sanctioned Iran-backed Popular Mobilization Forces (PMF), killing at least one police officer and leading to the arrest of 14 fighters, authorities said. The clash broke out in Baghdad's Karkh district after a group of fighters from the P PMF stormed an Agriculture Ministry building as a new director was being sworn in, the Interior Ministry said in a statement. The PMF is an umbrella group of mostly Shiite paramilitary factions that was formally integrated into Iraq's state security forces and includes several groups aligned with Iran. According to the Interior Ministry, the PMF fighters burst into the building during an administrative meeting, causing panic among staff who alerted police. Security sources and three employees at the scene said the fighters had wanted to stop the office's former director from being replaced. A statement from the Joint Operations Command, which reports directly to Prime Minister Mohammed Shia al-Sudani, confirmed that the detainees were PMF members and had been referred to the judiciary. At least one police officer was killed and nine others were wounded, police and hospital sources said. Sudani ordered the formation of a committee to investigate the incident, the command said. The arrested fighters belong to "PMF brigades 45 and 46", the statement added. Both brigades are affiliated with Kataib Hezbollah, an Iran-aligned Iraqi armed group, according to Iraqi security officials and sources within the PMF.
Arab News
3 hours ago
- Arab News
Pakistan PM orders special flight arrangements for pilgrims' travel to Iran, Iraq
ISLAMABAD: Prime Minister Shehbaz Sharif has asked authorities to make special flight arrangements to facilitate Pakistani pilgrims' travel to Iran and Iraq, Pakistani state media reported on Sunday. The development came hours after Pakistan suspended road travel to Iran and Iraq for the Arbaeen pilgrimage this year, citing public safety and national security concerns. Thousands of Pakistanis travel to Iran and Iraq annually to visit religious sites, including observing Arbaeen (Arabic for 'forty'), a significant religious occasion in Shia Islam that marks the end of a 40-day mourning period for Imam Hussain, who was 'martyred' in the Battle of Karbala in 680 AD. On Sunday, Interior Minister Mohsin Naqvi met with PM Sharif and briefed him regarding the new policy for Pakistani Shia pilgrims' travel to Iran and Iraq, the Associated Press of Pakistan (APP) news agency reported. 'The prime minister directed the Minister for Aviation to arrange special flights for the zaireen (pilgrims),' the report read. Pakistanis traveling to Iran and Iraq via road have often been targeted in sectarian attacks by armed groups in Pakistan's restive Balochistan province, which shares border with Iran. Islamabad's decision to restrict road travel came in the wake of a rise in militant attacks in the province by ethnic Baloch militant groups who demand a greater share of the province's mineral resources from Islamabad. 'After extensive consultations with the Ministry of Foreign Affairs, Balochistan Government, and security agencies, it has been decided that zaireen will not be allowed to travel to Iraq and Iran by road for Arbaeen this year,' Naqvi wrote on X. The Pakistani government is also introducing a new, centralized system for organizing pilgrimages to holy sites in Iran and Iraq that would require interested parties to register as tour operators, the Pakistani religious affairs minister announced this month. The statement followed an announcement by Naqvi that Pakistani pilgrims would not be able to individually travel for religious pilgrimages from Jan. 1 next year. The decision was made after Iran, Iraq and Syria raised concerns with Islamabad about some of these Pakistani pilgrims overstaying their visas or working illegally in the host countries. Pakistan previously had no formal structure for people to travel to Iran and Iraq for religious purposes. Although a system was approved in 2021 to organize these pilgrimages, but little progress was made on its implementation.
Arab News
7 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.
