SULAIMANI (ESTA) — Iraqi legislators voted to pass the draft federal budget bill for the years 2023, 2024, and 2025, according to a statement released by the legislative chamber on Monday.
After four days of fierce political confrontation between the parties, the chamber passed all articles of the three-year federal budget bill amid a dawn session earlier today.
The new budget outlines annual spending of 198T IQD (153B USD).
The budget is based on an oil price of $70 per barrel and projects oil exports at 3.5 million barrels per day (bpd), including 400,000 bpd from the semi-autonomous Kurdistan region, lawmakers said.
Under the Iraqi constitution, the Kurdistan Region is also entitled to a portion of the national budget. 12.6 percent of the newly passed federal budget is allocated to the Kurdistan Regional Government (KRG).
The budget sets the exchange rate for oil revenues in U.S. dollars at 1,300 dinars per dollar. It will remain valid through 2025, though it is subject to amendment, including to the oil price it uses given its near-total dependence on oil revenue.
The parliament’s move that passed the budget is expected to address longstanding disagreements between Baghdad and the KRG over budget shares and hydrocarbon revenues, with its oil revenues set to be deposited in an account overseen by the Iraqi central bank.
Baghdad previously had no say over Kurdistan’s expenditure of oil revenues, with Kurdistan unilaterally exporting crude via Turkey despite Baghdad’s objections.
But Kurdish officials were forced to negotiate with Baghdad after Turkey halted crude exports in April when an international arbitration ruling deemed them unlawful.
Under an agreement signed between Baghdad and Erbil in April, Iraq’s state-run marketing company SOMO will have the authority to market and export crude oil produced from fields controlled by the Kurdish region.
Iraq’s budgets are supposed to be adopted before the beginning of the year they cover but are frequently delayed or not passed at all due to instability and political disputes.
