Baghdad orders halt to KRG budget transfer

New oil and revenue-sharing agreements hinge on negotiations, but maximalist demands and financial constraints hamper compromise.
An Iraqi federal government delegation led by Deputy Prime Minister for Energy and Oil Minister Thamir Ghadhban (far left) meets with leaders from Erbil, led by KRG Finance Minister Awat Janab (far right) in Baghdad on April 19, 2020. (Photo credit: Oil Ministry)

Leaders in Baghdad and Erbil are staking out hardline positions in oil and revenue negotiations that have become increasingly urgent and difficult due to a severe financial crisis.

Following an order from the Council of Ministers on April 16, the federal government has not sent any budget transfer to the semi-autonomous Kurdistan Regional Government (KRG) in April, according to several government officials familiar with the issue. If the financial freeze continues, it could undermine the foundations of Kurdistan's economy, including public sector salaries and payments to international oil companies.

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