Iraqi-Kurdish pipeline is halted; tanker sits offshore Texas

Iraqi Kurdistan's attempts to export oil independently of Baghdad hit another obstacle this week, as a Turkish energy official and industry sources said the autonomous region's pipeline to the Mediterranean has been shut for the past week.

The Kurdistan Regional Government (KRG) has not launched any oil tankers from the Turkish port of Ceyhan in over a month as Baghdad has moved to block the vessels from unloading at foreign ports.

The latest set-back comes as Iraqi Kurdistan's increasingly bitter legal and diplomatic struggle with Baghdad over oil sales threatens to spill over into the United States.

Tensions spread to the US

Arguing that all oil sales outside its control are illegal, Baghdad this week tried to persuade a Texas court to seize 1 million bbls of oil aboard the United Kalavrvta tanker, which has been anchored off the port of Galveston since the weekend.

But after a US judge on Tuesday said she lacked jurisdiction given the ship's distance from the shore, the KRG hit back at Baghdad, filing a letter with the Texas court arguing its sales are allowed under the Iraqi constitution.

"The federal government cannot win, because our crude is legally produced, shipped, exported, and sold in accordance with the rights of the Kurdistan Region as set forth in the Iraqi constitution," KRG Natural Resources Minister Ashti Hawrami said.

The United Kalavrvta tanker holds more than 1 million bbls of crude worth more than US$ 100 million at international prices. It was still anchored off Galveston on Wednesday, according to Reuters AIS Live ship tracking.

Oil is key to Kurdish independence

The dispute over exports reflects Iraqi Kurds’ emboldened steps toward seizing greater political and economic autonomy, with oil sales seen as central to the Kurdish dreams of independence despite Baghdad's opposition.

Arbil began selling its oil via a new pipeline through Turkey in May, but so far has only successfully sold and delivered one tanker filled with oil from the line.

Baghdad has threatened oil traders and put diplomatic pressure on governments not to buy the Kurdish crude.

One Kurdish tanker, the United Leadership, has been anchored off Morocco for almost two months. Another, the United Emblem, has sailed to Asia, and is now anchored off Malaysia.

Unable to deliver its crude, storage tanks for Kurdish crude at the Turkish Mediterranean port have Ceyhan have backed up and are now at capacity, forcing the KRG to shut-off its pipeline.

Edited from various sources by Elizabeth Corner

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