Baghdad-Erbil Oil Talks Stall with 400,000 bpd Offline, KRG Ratifies Salary Deal, Baghdad Awaits Oil Delivery Confirmation

Negotiations between Iraq's federal government in Baghdad and the Kurdistan Regional Government (KRG) in Erbil over resuming Kurdish oil exports to Turkey and the payment of public sector salaries have stalled, prolonging a months-long crisis. The talks, which are considered crucial to resolving a longstanding political and budgetary dispute that has strained relations between Baghdad and Erbil, failed to produce progress as of early July 2025. Iraq's Cabinet did not address Kurdish oil exports or unpaid salaries during a July 8 meeting, leaving approximately 400,000 barrels per day of oil offline and resulting in an estimated $8–9 billion in lost income. However, by mid-July, the KRG ratified a new understanding with Baghdad regarding employee salaries. Baghdad is currently awaiting official confirmation from the KRG on the timing of oil deliveries through pipelines and the state-owned SOMO company, as well as the KRG's readiness to transfer oil revenues in line with recent negotiations. Additionally, Baghdad expects the KRG to approve the deposit of salaries sent by Baghdad into federal bank branches for regional employees.