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Tankers in limbo as Baghdad-Irbil oil conflict rages

The oil tanker SCF Byrranga, which was renamed the United Kalavryta in March 2014 (also known as United Kalavrvta) and is currently off the coast of Texas with a cargo of Kurdish crude oil, is seen off the Isle of Arran, Scotland in this handout photo taken February 21, 2014. (REUTERS/Tom Duncan)

ISTANBUL/LONDON: Iraqi Kurdistan’s attempts to export oil independently of Baghdad hit another obstacle Wednesday, 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 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 setback comes as Iraqi Kurdistan’s increasingly bitter legal and diplomatic struggle with Baghdad over oil sales threatens to spill over into the United States.

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

But after a United States judge 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 barrels of crude worth more than $100 million at international prices.

It was still anchored off Galveston Wednesday, according to Reuters AIS Live ship tracking.

Baghdad has cut the KRG’s budget since the start of the year over the oil dispute.

Irbil has begun 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 Ceyhan have backed up and are now at capacity, forcing the KRG to shut-off its pipeline.

 
A version of this article appeared in the print edition of The Daily Star on July 31, 2014, on page 8.

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Summary

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

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

Irbil has begun 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.


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