A ship containing approximately 1 million bbls of crude oil worth around US$ 100 million is currently stranded 57 miles off the coast of Galveston in Texas.
The United Kalavrvta tanker's cargo consists of crude from northern Iraq’s Kurdish region and is currently prohibited from entering the US due to a lawsuit filed by Iraq’s central government.
Baghdad has filed a lawsuit in Texas claiming that the oil was sold without the permission of the Iraqi central government, and insisting that it is the only authority capable of selling the country’s resources.
Last night US District Judge Nancy K. Johnson approved the request from Baghdad and issued an order to the US Marshals Service, an enforcement agency within the US Department of Justice, to seize the oil. However, she also said that unless the tanker enters the territorial waters of the US it is out of American jurisdiction.
In response to Johnson’s ruling, Iraqi Oil Ministry spokesman Assem Jihad reiterated Baghdad’s claims to the country’s oil: “The Iraqi government consider these oil shipments to be illegal and we hope that everybody in the world will respect our measures”.
State Department spokeswoman Jen Psaki said: “We believe that Iraq’s energy resources belong to the Iraqi people and certainly have long stated that it needs to go through central government”. Hence, the US seems to be publicly backing Baghdad’s assertion.
Richard Stoll, a Professor at Rice University, said that this makes good political sense. In terms of stability, the US bet is with the central government. “If you want to have any hope of changing the central government, then you really can’t allow the Kurds to do this”, he said.
However, the US has not explicitly barred companies from purchasing oil from the Kurds. Instead issuing a caution that doing so could result in legal action. Despite this though, Baghdad has been able to make use of US courts and this is perhaps in itself significant, explains Richard Mallinson of UK-based consultancy Energy Aspects.
“The question is whether the KRG [Kurdistan Regional Government] has anything left up its sleeve to either overcome this legal obstacle or to find buyers elsewhere in the world. The prospect for the Kurds putting oil exports on a sustainable footing without Baghdad’s approval are looking increasing dim”.
Written by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/30072014/iraqi-kurdish-oil-seized-by-us-1039/