2/6/2025–||Last updated: 23:40 (Mecca time)
Relations between the Iraqi Kurdistan and the central government in Baghdad have been escalating tensions in recent weeks, amid complex financial and political disputes that threaten a potential explosion in Iraq’s internal landscape.
In a report by the Independent’s Turkish edition, writer Sarbast Farhan Sindi sheds light on this tension, noting that the current crisis revolves around two main issues: The salary crisis and energy agreements with American companies that have angered Iran.
The roots of the tension go back to the Iraqi Ministry of Finance’s decision late last month not to pay the salaries of Kurdistan Region employees, which was seen as a declaration of estrangement.

The main reason
Baghdad’s escalation, according to the writer, is due to a mega deal that KRG President Masrour Barzani signed with two American energy companies during his visit to Washington in mid-March.
The deal, worth more than $100 billion, was deemed by Baghdad to be in violation of the Iraqi constitution and was openly objected to by Baghdad. The central government has made it clear that it does not oppose the presence of American companies in Iraq, but it rejects any agreements made outside its framework.
The tension is also linked to US sanctions on Iran. The United States seeks to end Iraq’s dependence on Iranian gas and has officially informed Baghdad that it will not grant new exemptions for its imports, prompting the US administration to coordinate with the Baghdad government to find alternatives, most notably Kurdish gas.
The Iranian factor
Herein lies the sensitivity of Tehran, which sees the Kurdistan Region’s development of its gas resources as a direct threat to its influence, as it will weaken the energy card it has long used as a leverage inside Iraq.
Sindi suggests that Baghdad’s hardline stance is an indirect response to Iranian pressure, which explains Baghdad’s tense behavior in dealing with the issue of salaries and energy agreements.
As a result of this tension, the Kurdistan Democratic Party (KDP), the main partner in the federal government, held an emergency meeting on Monday, threatening to escalate and possibly withdraw from the government if salaries are not paid before Eid al-Adha.
The two main Kurdish parties – the KDP and PUK – hold pivotal positions in the central government, including the presidency, the deputy speaker of parliament and several sovereign ministries, making their positions extremely influential in determining the course of the relationship between Erbil and Baghdad.

Internal divisions
In the broader political context, the division within the Shiite community enhances Erbil’s ability to maneuver. The absence of Muqtada al-Sadr from the elections weakened the regime’s popular legitimacy and worried its opponents, including Nouri al-Maliki.
For his part, Prime Minister Mohammed Shi’a Al-Sudani to maintain a delicate balance between openness to Washington and neighboring countries and relations with Tehran.
Sudani is likely to try to form a coalition of Shiite moderates such as Hadi al-Amiri, and perhaps even Sadr, to curb the radical pro-Iranian wings such as Qais al-Khazali and Abu Ala al-Wala’i, according to the author.
A delicate balance of interests
This alliance may pave the way for Maliki’s removal from the scene, which could open the door to new compromises that include Sadr’s inclusion back into the political process.
All of these dynamics, Sindi says, give the KDP more ability to impose more favorable terms in any future negotiations with Baghdad.
The writer also emphasizes that a complete estrangement between Erbil and Baghdad is not likely, despite the intensity of the escalation, and that moderate figures are expected to intervene to contain the crisis, especially Sudani and Ameri.
In the end, the writer concludes by saying that the future of the relationship between the two sides remains subject to the delicate balance between Iranian and American interests, the options of the Kurdish forces, and developments in the internal Shiite scene in Iraq.
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2025-06-02 17:33:00