Baghdad Demands Oil from Kurdistan Amid Budget Standoff
A dispute over a budget phrase has escalated tensions between Baghdad and Erbil, with Iraq demanding 500,000 barrels of oil from the Kurdistan Region.
The 'actual expenditure' clause in Iraq's draft 2027 budget law is at the center of the standoff. The Kurdistan Region's delegation wants it removed, citing concerns that it gives Baghdad too much power over their share of revenue.
Kurdish officials argue that under this phrase, their allocation would rise or fall entirely on how much Baghdad chooses to spend. If Iraq's budget totals 200 trillion Iraqi dinars but the federal government spends only 140 trillion, Kurdistan's share would be calculated and paid from what is left over for operational spending.
The Region has offered to deliver 265,000 barrels of oil per day to meet Baghdad's demand of 500,000 barrels, citing limited production capacity. The outcome of talks between Iraqi Finance Minister Falih Sari and Prime Minister Ali al-Zaidi will shape how the Region's share is defined in the coming budget cycle.
The Kurdistan Regional Government has also pressed for clarity on revenue categories that require them to transfer 50% to Baghdad, as well as funding for institutions such as medication and wheat subsidies. These demands are tied to the daily functioning of Kurdistan Region institutions, including promotions, job grades, and appointments.