On the sidelines of the Sulaimani Forum, “they discussed Erbil-Baghdad relations and the continuation of dialogue to resolve their outstanding issues,” according to a Kurdistan Region Presidency statement. “Both sides emphasized the importance of maintaining security and stability in the region,” and the broader regional situation and its impact on Iraq and the Kurdistan Region were also addressed.
Since 2014, tensions between Erbil and Baghdad have simmered over budget and oil disputes. The federal government cut the Kurdistan Region’s share of the national budget that year, prompting Erbil to independently export oil and rely on the revenues to fund its public sector.
However, falling oil prices and the costly war against the Islamic State (ISIS) strained the Region’s finances, triggering austerity measures. Public servants faced repeated salary delays and cuts, with Baghdad now assuming responsibility for payments.
The crisis deepened in March 2023, when Kurdish oil exports were suspended following an international court ruling in favor of Baghdad. The ruling found that Turkey had violated a 1973 pipeline agreement by allowing Erbil to export oil without federal approval.
Despite several rounds of negotiations involving federal and regional officials, as well as international oil companies operating in the Kurdistan Region, no breakthrough has been achieved. Oil companies demand contractual clarity and payment guarantees, Baghdad insists on federal oversight, and Erbil continues to push for an agreement that safeguards its economic autonomy.
The US has been actively urging both sides to restart oil exports. In a readout released Friday, the US State Department said Secretary of State Marco Rubio and Kurdistan Region Prime Minister Masrour Barzani “agreed that reopening the Iraq-Türkiye Pipeline immediately is crucial to protecting past US investments and attracting future investment.”
