Tuesday, 29 July 2014

Iraq: US court order halts US$100 million sale of Kurdish oil

US court order halts US$100 million sale of Kurdish oil
There have been new developments in the tit-for-tat struggle between Baghdad and Erbil over independent oil sales oil sales by the KRG. The Kurds have suffered a fresh blow to their attempts to sell the oil that they have been exporting via Turkey. It has been reported that an US judge, in response to a lawsuit filed by the Baghdad government, has signed an order to seize the US$100 million crude oil cargo from a tanker anchored off the Texan coast.

It was reported at the end of July that the United Kalavrvta, which left the Turkish port of Ceyhan in June, had sailed to the US and was planning to discharge at the Texan port of Galveston. The tanker informed the authorities that it was intending to discharge its cargo at sea into smaller vessels that would then deliver the crude to the port. On 27 July the US Coast Guard in Houston inspected the Marshall Islands-flagged tanker and cleared it for unloading which seemingly opened the way for the delivery to take place.

However, in its filing in the US District Court for the Southern District of Texas, Iraq asked for an order allowing the cargo to be seized by the US Marshals Service, arguing that independent Kurdish oil sales amounted to “smuggling”. Court filings showed on 29 July that the order had been granted by Judge Nancy Johnson. 

AET Offshore Services, an intermediary hired to unload the tanker, had previously asked in a separate court filing on 28 July if Iraq’s claims were valid. It is still not known who has purchased the crude oil and the court filings took no steps towards remedying this, by refusing to name the end-buyer. Companies have so far proved reticent about purchasing crude exported to Turkey from the Kurdish region because Baghdad has threatened legal action against all buyers of non-approved oil exports.

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2014 Menas Associates

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