Iraq’s federal revenue coordination plan entered a new phase after the Iraqi Cabinet held an emergency session. Prime Minister Mohammed Shia Al-Sudani led the meeting and announced decisions on oil production and financial ties with the Kurdistan Regional Government (KRG).
The Cabinet required the KRG to transfer all oil production to the State Oil Marketing Organization (SOMO). In return, the federal government will provide $16 per barrel. The payment can be either in cash or in kind. This applies to a minimum delivery of 230,000 barrels per day (bpd). Any extra oil will follow the same rule.
The Kurdistan Region currently produces 280,000 bpd. It will keep 50,000 bpd for local use. The remaining 230,000 bpd will go to SOMO. If exports stop for any reason, the KRG must send the entire amount to the Ministry of Oil instead.
The KRG will pay for the production and transport of the oil used locally. It must also send revenues from the sale of refined products to the federal treasury. These transfers will occur after deducting local costs.
In addition, The Cabinet outlined several financial steps to improve coordination. First, the KRG must transfer 120 billion Iraqi dinars for May’s non-oil revenue. Second, a joint team will audit and classify non-oil revenues starting from May. Third, a new committee will monitor salary localisation in the Region. The team must finish the task within three months, as ordered by a federal court.
Another group will review any extra spending from the KRG between 2023 and 2025. The Cabinet linked the release of May salaries to SOMO confirming oil delivery through the Ceyhan terminal.
All steps outlined in the decision take effect immediately. The Cabinet wants full enforcement from both sides.
These new terms mark a shift in Iraq’s federal revenue coordination plan. The government seeks to increase transparency and enforce agreements. It also wants to build stronger ties between Baghdad and Erbil.
This plan covers both oil and non-oil revenues. It also affects payroll systems and budgeting. If followed fully, the decisions could lead to better trust and long-term cooperation.