US urges Baghdad, Erbil to settle salary crisis

Shafaq News/ On Tuesday, the US State Department urged the Iraqi and Kurdistan Regional governments to resolve their salary dispute through constructive and consistent dialogue, warning that the prolonged crisis could damage Iraq’s investment environment.

At a press briefing in Washington, State Department spokesperson Tammy Bruce said the United States is closely following the situation in the Kurdistan Region, stressing that resolving the dispute in line with constitutional responsibilities would send a clear signal that Iraq is committed to creating conditions favorable to investment, including from American companies.

Bruce also indicated that meaningful progress on the issue could help facilitate broader cooperation between Baghdad and Erbil, including the reopening of the Iraq–Turkiye oil pipeline and the expansion of energy exploration activities.

Her remarks came as tensions between the federal and Regional governments have escalated over the release of public sector salaries. Federal authorities have linked disbursements to the KRG’s full transfer of oil exports to the state-owned SOMO company and increased oversight of non-oil revenues. The KRG has pushed back, arguing that the conditions are excessive and deviate from earlier understandings.

The deadlock has resulted in delayed salary payments for hundreds of thousands of public employees in the Kurdistan Region. As a temporary measure, Iraqi Prime Minister Mohammed Shia al-Sudani later authorized the payment of May salaries through a federal loan, pending a permanent resolution.