Baghdad-Erbil Deal Silent on KRG's Surplus Oil

Under former Prime Minister Nouri al-Maliki, deep disagreements between different factions, in particular the central government and Kurds, meant the country’s parliament never passed the budget law for 2014.

“Without this agreement. Iraq’s 2015 budget balance would have suffered a major deficit. This will be a return of sovereignty and trust to Iraq that did not exist under Maliki,” said Shaban.

Some believe the current deal should constitute the basis for a broader, longer-lasting agreement between the two sides and should not be viewed as a convenient short-term contract.

“If it is not going to be a principled agreement then it won’t hold, which means both sides will lose,” Aziz Kadhim Alwan al-Akeli, a member of parliament from the Shiite-dominated al-Mowaten bloc, told Al-Monitor. Iraqi Oil Minister Adil Abdulmahdi, who played a pivotal role in negotiating the deal, hails from al-Mowaten bloc as well.

Under the current deal, the Iraqi government will also pay the Kurdish peshmerga forces nearly $1 billion in due payments.

The lack of clarity as to how the KRG should handle the remainder of its oil not covered by the deal might potentially affect the implementation, and even survival, of the much-touted agreement.

Distrust has been rather the norm in relations between the current class of politicians on both sides for much of the past decade.