Oil export earnings by Iraq’s Kurdistan Regional Government (KRG) are set to rise by 3% in 2016 to $5.44bn, with monthly payments from buyers averaging $453mn in the first half of the year. But with buyers having overpaid by around $200mn in advance payments so far this year, revenues would fall below 2015 levels if these debts are called in over the coming months (see chart 1).

Erbil received a share of the Iraqi federal budget for the first five and a half months of 2015, but from mid-July began selling oil independently and Baghdad cut off payments as a result. Since then it has relied entirely on direct sales revenues, which have faltered due to falling prices and output. (CONTINUED - 1245 WORDS)