US judge signs order to seize Kurdish oil from tanker off Texas

HOUSTON - Reuters

The SCF Altai tanker is seen anchoring near the southern Israeli city of Ashkelon. A tanker carrying crude oil from Iraqi Kurdistan was cleared by the US Coast Guard to unload its cargo at sea off Texas.

Acting on a request from the central government in Iraq, a U.S. judge has signed an order telling the U.S. Marshals Service to seize a cargo of oil from Iraqi Kurdistan aboard a tanker off the Texascoast, court filings showed July 29.

The United Kalavrvta tanker, carrying some 1 million barrels of crude worth about $100 million, arrived near Galveston Bay on July 26 but has yet to unload its disputed cargo.

The ship, which is too large to enter ports near Houston and dock, was given clearance by the U.S. Coast Guardon July 27 to transfer its cargo offshore to smaller boats that would deliver it to the U.S. mainland.

But Iraq’s central government, in a court filing on July 28, laid claim to the cargo that it says was sold by the regional government of Kurdistan without permission from Baghdad, which has said such deals amount to smuggling.

To carry out the order from Magistrate Judge Nancy K. Johnson of the U.S. District Court for the Southern District of Texas, the Marshals Service may need to rely on companies that provide crude offloading services.

The judge’s order said the vessel would be allowed free movement after the cargo is unloaded.
The U.S. State Department has expressed fears that independent oil sales from Kurdistan could contribute to the breakup of Iraq, has said the oil belongs to all Iraqis, and warned potential buyers of legal risks.

But it has also made clear it will not intervene in a commercial transaction.

The filings on July 28 did not name the end-buyer of the cargo in the United States.

AET Offshore Services, a company in Texas that had been hired to unload the tanker for the buyer, asked in a separate court filing whether Iraq’s claims were valid.

Piecemeal oil exports have gone from Iraqi Kurdistan to Turkey and Iran by truck in the past, which Baghdad also opposed.

But the opening of a new pipeline to Turkey earlier this year, which could supply the Kurds with far greater revenues, has met much fiercer opposition from Baghdad.
One cargo of Kurdish crude was delivered in Houston in May to an unidentified buyer, and four other cargoes of Kurdish crude have been delivered this year in Israel.

Ramped up attempts
Washington has pressured companies and governments not to buy crude from the Kurdish Regional Government (KRG), but it has stopped short of banning purchases by U.S. firms.
The KRG has renewed its push for an independent state amid the latest violence roiling Iraq. Its relationship withBaghdad has deteriorated over what it sees as Maliki’s role in stoking the crisis and the long-running dispute over oil sales.
Baghdad’s military retreat from the north under a lightning assault led by the Islamic State of Iraq and the Levant (ISIL) last week allowed the KRG’s Peshmerga forces to seize control of long-disputed Kirkuk and its oil reserves - the potential economic lynchpin of a sovereign Kurdish entity.
Baghdad has threatened to sue anyone that buys Kurdish oil.
The KRG’s pipeline is currently pumping around 120,000 barrels per day to Ceyhan.
The region’s natural resources minister is aiming to export 400,000 bpd by year-end.