ERBIL, Kurdistan Region of Iraq - The United States on Monday urged Erbil and Baghdad to resolve their outstanding financial disputes and act to reopen the Iraq-Turkey Pipeline for the resumption of oil exports, an official from the US Department of State told The New Region.
"We have consistently encouraged Baghdad and Erbil to resolve their issues regarding salaries and the reopening of the ITP,” read a statement attributed to a State Department spokesperson sent to The New Region.
The Iraqi government and the KRG have been at loggerheads over the management of the Kurdistan Region’s oil fields and the disbursement of the Kurdistan Region’s civil servant salaries for years, with the latest episode coming in May after Iraq’s Finance Minister Taif Sami notified the KRG that they will not be funding the Region’s civil servant salaries, arguing that the Region had already exceeded its annual budget share in May.
Public employees in the Region have yet to be paid for May and June despite and agreement being reached between the two governments on Wednesday, whereby the Kurdistan Region has agreed to export 230,000 barrels of oil through the federal government’s State Oil Marketing Organization (SOMO), in addition to paying 120 billion Iraqi dinars in non-oil revenues to Baghdad as the federal treasury’s share.
Sami on Sunday said that a delay in submitting Iraq’s budget table is attributable to a failure in resolving disputes between Erbil and Baghdad, despite an agreement being reached between the two governments in recent days.
"Addressing these issues quickly would signal that Iraq puts the interests of its people first and is committed to creating an environment in which companies will want to invest,” the spokesperson added. "Establishing that business-friendly environment requires respecting contract sanctity and providing necessary security guarantees.”
The spokesperson detailed that “demonstrating a commitment to safeguarding and supporting international investment is especially important in the current environment where drone attacks have targeted US and other international companies’ operations in the Iraqi Kurdistan Region without consequence.”
The demand by the US for Erbil and Baghdad to resume oil exports came hours after Turkey said it would not renew an oil agreement signed between Iraq and Turkey in 1973, on oil exports, which is set to be terminated in July 2026.
A senior Turkish official told Reuters that the underutilization of the Iraq-Turkey pipeline is unfortunate and Ankara wants a “new and vibrant phase” to benefit both sides.
"A new and vibrant phase for the Iraq-Turkey Pipeline will benefit both countries and the region as a whole,” Reuters quoted the Turkish official as saying.
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