Federal Government Demands Oil Production
Beyond the Kurdistan Region’s Capacity
Critical days lie ahead for the economic future and financial entitlements of the Kurdistan Region. A high-level delegation from the Kurdistan Regional Government (KRG) has visited Baghdad multiple times, exerting every effort to enshrine the Kurdistan Region’s constitutional rights and financial entitlements in the 2027 budget.
When the contents of the draft 2027 budget were disclosed to Kurdish representatives, the KRG, and the people of the Region, everyone was stunned by the figures designated as the Kurdistan Region’s share, which blatantly violate existing laws, statutory provisions, and constitutional rights.
The most glaring violation lies in the clause determining the Kurdistan Region’s share, which sets it at 12.67%. This comes despite the fact that, according to the latest general census conducted in 2024—which was supposed to serve as the baseline for all planning and statistics—14.14% of Iraq’s total population resides in the Kurdistan Region.
A reduction of nearly two percent translates into a cut of trillions of dinars from the Kurdistan Region’s financial entitlements. Beyond this point, the Iraqi government has slashed the Kurdistan Region’s investment budget so drastically that it did not even deem a single percent justifiable, at a time when the Region should rightfully receive at least seven trillion dinars.
The Kurdistan Region’s share of total public expenditures stands at only 13.3 trillion dinars, representing just 6.1% of the total budget size. Furthermore, the investment budget allocated to the Kurdistan Region does not even reach half a trillion dinars.
Regarding oil exports, Baghdad has imposed a quota of 400,000 barrels per day on the Kurdistan Region. In reality, the resumption of oil exports is tied to Iraq as a whole, and any shortfall in the Region’s export capacity is directly linked to the obstacles and bottlenecks created by Baghdad; the Kurdistan Region has no objection to exporting whatever volume is feasible. There is growing concern that in the event of any export shortfall caused by unforeseen circumstances, Baghdad will deduct further from the already diminished share allocated to the Kurdistan Region.
The violations are not limited to these clauses alone. The draft budget also holds the Kurdistan Region liable for repaying sovereign debts from which it derived no benefit, while having excluded the Region from receiving the proceeds of those loans in the first place. Moreover, Baghdad pegged the Kurdistan Region’s budget allocation to actual (operational) expenditures rather than the total general budget, and beyond deducting sovereign expenditures, it incorporated national debts into the same equation and imposed them onto the Kurdistan Region.
The Kurdistan Region’s delegation remains in Baghdad precisely to address and rectify these shortcomings. If the draft budget is submitted to parliament before these errors are corrected, it could be passed by a majority vote, stripping Kurdistan of its constitutional rights. Political observers believe, however, that the Kurdistan Region can apply political pressure, as it still holds numerous leverage cards.