Iraq/Kurdistan: Can the Iraqi-Kurdish Oil Deal Last?

Nov 18, 2014 | Nick Cunningham, Christian Science Monitor
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Kurdistan and the Iraqi central government have reached an important agreement over oil.

Although the deal is only an interim agreement, leaving larger issues unresolved, the two sides forged a short-term compromise. The accord calls for the payment of $500 million from Baghdad to the Kurdish Regional Government (KRG). In return, the Kurds will turnover around half of their daily oil production – 150,000 barrels of oil per day.

The two sides have been at an impasse since the beginning of the year. The KRG began exporting oil through Turkey without the approval from the central government in Baghdad. Under Iraqi law, oil must be exported under the auspices of a state-owned company. In retaliation for trying to sell oil on its own, Baghdad cut off the periodic revenue sharing payments to the KRG, which under Iraq’s constitution, amounts to 17% of the national budget.