Analysis: As cash flows from Baghdad, political risks deepen for Kurdistan and its oil sector
A new era of financial integration with Baghdad has provided the KRG with badly needed budget support while also exposing new levels of political vulnerability.
Iraqi Prime Minister Mohammed Shia al-Sudani (right) hosts Massoud Barzani, the president of the Kurdistan Democratic Party, in Baghdad on July 3, 2024. (Photo credit: Prime Minister's Office)
Iraq's Kurdistan region has entered a new era of financial integration and political dependence on Baghdad, as federal money is now flowing to Erbil at levels not seen for the past decade.
Federal budget transfers have averaged $618 million per month this year through August, according to an Iraq Oil Report analysis of government data, keeping the Kurdistan Regional Government (KRG) solvent by funding a large majority of its expenditures.
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