ERBIL, Kurdistan Region of Iraq – Kurdistan Region Prime Minister Masrour Barzani and Iraqi Prime Minister Mohammed Shia’ al-Sudani are set to hold a phone call on Tuesday evening to discuss ongoing oil and salary disputes between Erbil and Baghdad, with the pair hoping to smooth out outstanding details and reach a final agreement.

The details of the phone call are set to be released shortly after, The New Region understands.

The call between the two leaders comes after a delegation from both sides engaged in talks lasting four days seeking to come to an agreement to resolve long-standing disputes between Baghdad and Erbil.

A senior Iraqi government source told The New Region that the negotiation process went well and that a preliminary agreement has been reached that would see the Kurdistan Regional Government (KRG) hand over fifty percent of all oil and non-oil revenues to Baghdad and the federal government resuming the payment of the Region's civil servant salaries.

News of the phone call comes after a regular meeting of the Iraqi Council of Ministers on Tuesday that was reportedly set to discuss the salary issue did not broach the topic at all, according to a source present at the session who spoke to The New Region.

Exports of the Kurdistan Region’s oil through the Turkish Ceyhan pipeline were halted in March 2023 after Ankara lost a case against Baghdad in a Paris-based arbitration court. The case accused Ankara of breaching a 1973 agreement by allowing the KRG to start selling oil independently of Baghdad.

In a letter addressed to the KRG in late May, Iraqi Finance Minister Taif Sami said that they are “unable to continue funding the Region,” arguing that the Region has already exceeded the 12.67 percent of the annual budget it is entitled to, totaling 13.5 trillion dinars. The issue has persisted despite numerous meetings since then to come to a solution between the two sides, the latest of which was a Kurdish delegation that returned to Erbil on Monday after striking a deal with Iraqi authorities to resolve financial issues between the two sides.

The distribution of the Kurdistan Region’s share of the federal budget has long been a point of contention between Erbil and Baghdad.

Years of conflict and unresolved issues between Erbil and Baghdad, and economic sanctions and pressure on Erbil by federal authorities, have pushed employees in the Region to live from paycheck to paycheck.

The recent suspension of salaries has sparked outrage among the Kurdistan Region’s public as well as the officials and politicians of the Region, who have decried the decision as “political.” The halt in salaries has led to a lawsuit filed against the finance ministry by the Region’s civil servants at the Federal Supreme Court in early June.