The Iraqi Finance Minister Hoshiyar Zebari said on Tuesday the Iraqi government drew up a $430 million budget for the Kurdish region to be paid for May, as they put a further strain on a oil exports deal.
Zebari said: "All the amounts for all ministries and state departments have been lowered.
“There are no negative effects on the deal: it is standing and still ongoing."
In December, a deal over oil exporting was implemented as it was considered a solution for a long-running dispute over oil exports
Both the Iraqi federal government in Baghdad and Kurdish regional authorities accused each others of violating the deal.
According to the deal, Kurds are expected to export 550,000 barrels per day (bpd) of oil as the federal government is supposed to reinstate a budget payment to the Kurdish region, which was slashed by Baghdad in 2014.
Kurdistan's Minister of Natural Resources, Ashti Hawrami, declared that his government had met the target required of oil and did not violate the deal, while the Iraqi government sent only 35 percent of the funds that should be sent to date.
Meanwhile, Baghdad said the Kurdish region did not hand over the agreed upon volumes to state-run oil marketing firm SOMO.
The Kurds threatened to sell oil independently if they did not receive their monthly $1.27 billion (1.2 trillion dinar) entitled in the budget.
On May 30, the Iraqi Prime Minister, Haider al Abadi, said in an interview that the region will not take the whole 1.2 trillion entitled in the budget for them even if they exported their full share of oil because it was drawn up when oil price was higher.
In May, an average of 577,621 bpd was exported via pipeline to Turkey, of which 448,889 bpd was handed over to SOMO, as Kurds said.