Israel accepts 1st delivery of disputed Kurdish pipeline oil

LONDON - Reuters

The SCF Altai tanker (R) docks near Israel's Ashkelon port June 20, 2014. REUTERS Photo

A tanker delivered a cargo of disputed crude oil from Iraqi Kurdistan’s new pipeline for the first time in Israel, despite threats by Baghdad to take legal action against any buyer.

The SCF Altai tanker arrived at Israel’s Ashkelon port early on June 20 morning, ship tracking and industry sources said. By the evening, the tanker began unloading the Kurdish oil, a source at the port said.

The Kurdistan Regional Government said on June 21, a day after the news was first reported, it did not deal with Israel in the sale.

“The KRG categorically refutes the claim that it has sold oil to Israel,” a spokesman for the Ministry of Natural Resources said in an e-mail. “The KRG has not sold oil either directly or indirectly to such a destination.”

The spokesman did not comment on questions asking who the KRG had sold the oil to, or how crude oil from Iraqi Kurdistan had been delivered to Israel.

Reuters was not able to confirm whether the KRG sold the oil directly to a buyer in Israel or to another party. Oil cargoes often change hands multiple times before reaching their final destination.

In a statement on its website earlier on June 21, the KRG said: “We are proud of this milestone achievement, which was accomplished despite almost three weeks of intimidation and baseless interferences from Baghdad against the tanker-ship owners and the related international traders and buyers.”

Securing the first sale of oil from its independent pipeline is crucial for the Kurdistan Regional Government (KRG) as it seeks greater financial independence from war-torn Iraq.

But the new export route to the Turkish port of Ceyhan, designed to bypass Baghdad’s federal pipeline system, has created a bitter dispute over oil sale rights between the central government and the Kurds.

The first tanker to carry Kurdish pipeline oil is still homeless after loading in May. After a false start sailing to the United States, the United Leadership tanker turned back towards Morocco, where it is anchored after local authorities refused to let it discharge for the Mohammedia refinery.

The SCF Altai did not arrive directly from Ceyhan.

The United Emblem was the second tanker to load crude at Ceyhan from the KRG pipeline at the start of last week. It then made a ship-to-ship transfer near Malta to the SCF Altai during June 14-16, several Maltese shipping and market sources said and ship tracking showed.

A third tanker was loading one million barrels of oil from the pipeline, a source at the Turkish ministry said on June 20.

Several market sources said the United Emblem tanker, which loaded the second batch, had gone back to Ceyhan to load the third cargo. Ship tracking showed the tanker berthed at one of the Ceyhan jetties on June 20.

Israeli refineries have taken Kurdish crude oil before but in small volumes, which were shipped to Turkish ports by truck. Some oil has also been stored there.