Iraq court orders oil revenues from Kurdish region to be given to Baghdad

Iraq's top court has ruled that the law on gas and oil in the Kurdish Regional Government (KRG) is against the central government’s constitution and that the revenue from exported oil should be delivered to Baghdad.

According to the Iraqi state news agency INA, the members of the Supreme Federal Court discussed the issue of oil exports from KRG, ruling on Tuesday: “The oil and gas law in the KRG is against the constitution of the federal government (Baghdad) and is not legal.”

The court obligated the KRG government to inform the Oil Ministry and the Financial Audit Court about the oil and gas export agreements.

“The oil revenues exported from the region should be handed over to the Oil Ministry of the central government,” the court ordered.

But Kurdish authorities are unlikely to comply with the ruling, given years of disputes over Baghdad's share of the petrol.

Iraq is the second largest producer in the Organization of the Petroleum Exporting Countries (OPEC).

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‘Review all contracts’

The ruling declared KRG oil contracts with oil companies, foreign parties and states invalid. This includes exploration, extraction, export and sale agreements, according to the ruling.

The ruling also stated that the oil ministry must be allowed to audit all agreements concluded by the KRG with oil and gas companies.

The KRG did not immediately respond to a request for comment.

The Kurdish region delivers 250,000 of its more than 400,000 barrels of oil per day to Baghdad, in return for its share of the federal budget, according to a deal struck between Baghdad and Erbil. 

The share is used to pay the salaries of civil servants and peshmerga fighters in the region.

The Kurdish region held a referendum on independence in 2017 that inflamed tensions with the federal government.

The nearly 3.5 million barrels of oil per day exported by the country account for more than 90 percent of Iraq's income.

Iraq's federal government has long called for all oil exports in the country to go through it.

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