By Benoît Faucon


LONDON—Iraqi Kurdistan’s oil minister on Tuesday said the Kurds’ fight against Islamic State militants risks being undermined by delays in oil payments from Baghdad for Kurdish crude.

But an official from the Iraqi central government said Baghdad disagreed with the Kurds’ estimates of payments due.

Baghdad and Kurdistan reached an agreement in December 2014, allowing the Kurds to export 550,000 barrels of oil a day under the central government’s supervision in exchange for receiving 17% of the national budget.

“The fight against ISIS across several thousand kilometers of front line cannot happen if you don’t have the economic means to do it,” Ashti Hawrami, the minister for natural resources of the Kurdistan Regional Government, told a conference here.

“When we have three months of peshmergas [Kurdish fighters] not being paid, it’s very difficult to see how this can be sustained,” he added.

While Islamic State has continued making headway in western Iraq against the central government’s forces, the semiautonomous KRG has mostly held up against the radical movement. But Mr. Hawrami said only about a third of what he estimated to be due had been paid in the past five months: 2.3 trillion Iraqi dinars ($2 billion) out 6.6 trillion dinars.

In addition, Mr. Hawrami said private oil companies operating in Kurdistan were owed more than $3 billion because of the delayed payments, which could make their presence unsustainable if the issue isn’t resolved.

But Falih Alamri, the director general of state-run Iraqi State Organization for Marketing of Oil, told the conference that Mr. Hawrami’s estimates were based on misinterpretations of the December deal. Both oil prices and some Iraq exports are lower than envisioned in the December deal, leading to fewer payments, he said.

The Wall Street Journal