The government of Kurdistan -- an autonomous province in northern Iraq -- says it has struck a deal with the central government in Baghdad to export $1 billion US dollars worth of oil each month.

Earlier this year, Baghdad cut oil exports through a Kurdish pipeline to pressure local authorities to renegotiate an oil revenue sharing agreement.

The KRG stopped delivering crude oil to the central government a year ago, when Baghdad reneged on payments. But the cash-strapped KRG needs to increase oil production to avert an economic collapse.