ERBIL, Kurdistan Region - Iraq’s Shiite-led Coordination Framework on Monday stressed the need to address issues between Baghdad and Erbil in line with the constitution and called for passing a long-delayed oil and gas law, saying it is essential to resolving ongoing disputes.
Regarding the budget dispute with the Kurdistan Regional Government (KRG), the statement emphasized the importance of "dealing with every national issue in accordance with the constitution and governing laws," and reaffirmed "the federal government's commitment to the rights of all its citizens and its serious efforts to remove all obstacles."
Tensions between Erbil and Baghdad escalated after the Iraqi finance ministry said it would halt all budget transfers to the KRG, including salaries for over one million public sector employees for the remainder of the year.
Iraqi Finance Minister Taif Sami accused Erbil of exceeding its 2025 budget share by over $10 billion and cited its failure to hand over revenues, while KRG Finance Minister Awat Sheikh Janab rejected the figures as “made up” and criticized Baghdad’s justification as “laughable.”
The Region’s ruling Kurdistan Democratic Party (KDP) called the move a violation of the Region’s constitutional rights. Meanwhile, Rahim al-Aboudi from Iraq’s National Wisdom Movement (Hikma), part of the Coordination Framework, said Prime Minister Mohammed Shia’ al-Sudani had pledged to send salaries as a loan if the KRG complies with audit and revenue handover requirements, adding that a Framework delegation is set to visit Erbil to ease tensions.
The Framework stressed "the necessity for the [Iraqi] parliament to enact an oil and gas law," describing it as "the essence of resolving the outstanding issues between Baghdad and Erbil."
The long-stalled oil and gas law has been under discussion since 2007, with both Baghdad and Erbil proposing competing drafts in 2023. Disputes persist over contract control, revenue sharing, and representation.
While the KRG has relied on its own 2007 law to sign oil deals, Baghdad maintains it has sole authority and demands all revenues go to the federal treasury.
A 2022 Federal Supreme Court ruling deemed the KRG’s oil law unconstitutional. The KRG rejected the decision and continued exports until a 2023 Paris-based arbitration court ruling halted exports through Turkey’s Ceyhan port.
In March, a federal lawmaker said the legislation is unlikely to pass this term due to the ongoing disagreements.
The Framework’s statement warned against "the use of political money to influence public opinion."
Zalmay Khalilzad, former US ambassador to Iraq, said on Monday that the suspension of salaries is compounding the difficulties faced by KRG employees.
“Baghdad's suspension of payment of salaries to KRG employees is creating a political crisis and is threatening to make the celebrations of the coming Eid [al-Adha on June 6] difficult and sad,” he said on X.
“Prime Minister Sudani cares about Iraq's Kurdish citizens and would not want to punish them because of disagreement with the regional government,” Khalilzad added, stressing that “restoring the payment before Eid is the vital first step towards the negotiations that are desperately needed on the issues affecting relations between Baghdad and Erbil.”
On Sunday, Iraq's Federal Supreme Court announced that it registered a lawsuit filed by public servants in the Kurdistan Region seeking an injunction to ensure continued salary payments. However, a senior Iraqi government source told Rudaw on Monday that a ruling is unlikely soon, as some court members are currently on pilgrimage in Saudi Arabia for Hajj.
