ERBIL, Kurdistan Region of Iraq - Iraq's finance ministry announced Tuesday that it has begun disbursing the May salaries of Kurdistan Region's civil servants, shortly after Erbil deposited 120 billion dinars into the ministry's bank account as part of an agreement between the two sides to resolve their outstanding financial disputes.

The Iraqi government and the KRG had been at loggerheads over the management of the Kurdistan Region's oil fields and the disbursement of civil servant salaries for years. The latest episode occurred in May after Iraq's Finance Minister Taif Sami notified the KRG that they would 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 last week between the two governments, whereby the Kurdistan Region 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 its share of the federal treasury, in exchange for salaries.

Erbil will begin exporting the available quantity of oil through SOMO, which currently stands at 80,000 barrels per day, due to significant damage to oilfields caused by frequent drone attacks.

“The Ministry of Finance has begun disbursing salaries for employees of the Kurdistan Region of Iraq for the month of May 2025. The disbursement of these dues follows the Kurdistan Regional Government's commitment to the aforementioned resolution, which stipulates that the Kurdistan Regional Government (KRG) will deliver the quantities currently produced from the Region's oil fields to the State Oil Marketing Organization (SOMO),” read a statement by Iraq's oil ministry.

The finance ministry of Iraq detailed that Erbil will be committed to exporting the current quantities of oil until reaching the originally agreed amount—230,000 barrels per day.

It also confirmed receiving "120 billion dinars from non-oil revenues” from Erbil.

The Ministry of Finance affirms that it will continue to "fulfill its legal and constitutional obligations towards the Kurdistan Regional Government as long as it continues to implement the federal budget law, the decisions of the Federal Court, and the recent Cabinet resolution."

“No problem will be created to the Erbil-Baghdad understanding,” on salaries and resumption of oil exports, Saadi Pira, a senior member of the Patriotic Union of Kurdistan (PUK), told The New Region. “Too many efforts were made to disrupt the Erbil-Baghdad agreement.”