ERBIL, Kurdistan Region of Iraq - After months of wrangling, the Iraqi government will disburse May salaries of the Kurdistan Region’s civil servants, coming days after Erbil and Baghdad reached an agreement to resolve their long-standing financial disputes.

“There is some good news. Today, a decision will be made to pay the May salaries of the Kurdistan Region’s employees,” Ekhlas al-Dulaimani, a lawmaker, and deputy head of the finance committee in the Iraqi parliament, told 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.

An agreement was eventually reached on Wednesday between the two governments, whereby the Kurdistan Region has agreed to export 230,000 barrels of oil through the federal government’s State Organization for Marketing of Oil (SOMO), in addition to paying 120 billion Iraqi dinars in non-oil revenues to Baghdad as the federal treasury’s share, in exchange for salaries.

The Kurdistan Region’s finance ministry on Tuesday announced that it had deposited a total of 120 billion Iraqi dinars of non-oil revenues “in cash" in the Iraqi finance ministry’s bank account at the Erbil branch of the Central Bank of Iraq.

“The Kurdistan Regional Government handed over 120 billion dinars in non-oil revenues to Baghdad. Thus, Sudani agreed to send May salaries,” an Iraqi government official confirmed to The New Region.

The official added Erbil will begin exporting the available quantity of oil through SOMO, which currently stands at 80,000 barrels of oil per day, due to significant damage oilfields have sustained because of frequent drone attacks.

Baghdad’s decision to pay the salaries comes a day after the United States urged Erbil and Baghdad to resolve their outstanding financial disputes and act to reopen the Iraq-Turkey Pipeline for the resumption of oil exports.

"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 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.