Erbil-Baghdad Agreement: Deal or No Deal?

Gardi said the KRG has currently adopted a “partial fulfillment” approach toward the deal, whereby it’s still giving some oil to SOMO as a sign that it is not willing to scrap the deal altogether.

Authorities in Baghdad, however, insist the KRG has not met its obligations and dispute the figures it has put forward.

SOMO head Falah al-Ameri told the Kurdish NRT television channel in early June that the KRG’s daily export levels had not even reached 500,000 bpd.

The absence of a neutral oil export third-party monitor has left the door open to politicization of the deal’s implementation and the presentation of often conflicting figures by each side.

Burdened by a heavy economic downturn and almost empty coffers, KRG officials say they need to generate revenue to support the vast number of people who rely on it for sustenance and to ideally fund some of the many halted infrastructure projects.

The Kurdish government is now contemplating a reverse approach. “The KRG wants to turn the equation upside down. … It wants to be in control of its oil and be able to sell it and then give Baghdad [its share],” Sardar Aziz, an energy adviser to the Kurdish parliament, told Al-Monitor.

For such a formula to be accepted by Baghdad, it requires renegotiating a new deal between the two sides. Aziz, however, is not optimistic about any new deal’s prospect of success.

“The expiration date on the deals between Baghdad and Erbil is getting shorter due to rapidly changing circumstances in the Middle East,” said Aziz. “You can’t have any long-term deal now because the balance of power keeps shifting all the time.”