Iraqi Kurdistan’s political leadership, under intense pressure from the Obama Administration, give its backing to the new Iraqi central government, but that doesn’t mean they’re on board unconditionally, and the big issue of oil revenue remains unresolved.
The Kurdistan Regional Government (KRG) has rejected the proposed Abadi government oil plan, which is to pay “installments” on past oil exports to the Kurdish government going forward.
The KRG is owed nearly $8 billion since January, when Iraq cut them off from promised oil payments over export disputes. The Kurds tried to export oil on their own to make up the difference, but threats of lawsuits by Iraq have made buyers tough to come by.
Iraq maintains they just don’t have the money anymore because of their budget shortfall, and is also trying to condition the “installment” payments on Kurdistan agreeing to once again give the central government a monopoly on production and exports.
Abadi may have the Kurds on board for the time being, but keeping them there is no guarantee they will remain there if the oil dispute, as well as territorial disputes over Kirkuk, remain unresolved.
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