Iraqi Kurdistan is set to buck the regional trend and take in more in oil export revenues this year than last. But modest gains are only thanks to traders’ overpayments – which will have to be paid back.

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...