Washington imports oil from Kurdistan

Washington imports oil from Kurdistan
2014-05-31T08:57:11+00:00

, ship-tracking data showed on Friday, indicating that the shipper may not have a buyer, Reuters said in news briefed by “Shafaq News”.

 

The United Leadership oil tanker has become a symbol of a wider conflict between Baghdad and Iraqi Kurdistan over oil sales from the autonomous northern enclave, as it contains the first crude to come out of the region's newly built pipeline into Turkey.

Since loading at the Turkish port of Ceyhan last week, the United Leadership set course for the U.S. Gulf Coast, according to ship-tracking and market sources, according to Reuters.

The U.S. State Department said that it did not condone oil sales bypassing Baghdad, and that any buyers could risk a legal suit with the central government.

"We do not support the export or sale of oil absent the appropriate approval of the federal Iraqi government," a U.S. State Department official said.

Despite its position, the U.S. has already imported small quantities of Kurdish oil, though not from the pipeline.

The Kurdish government insisted the oil is going to Europe, when asked about its U.S. destination and that it would be the "first of many such sales".

"One million barrels was sold by auction to both Germany and Italy. No shipment was sent to the United States," Moyad Talab, a spokesman for the Kurdistan Alliance to the central government, told Reuters.

HOMELESS

But for the moment, the oil appears to be homeless.

The tanker reversed course south of Portugal with a new destination, Gibraltar for orders, Reuters AIS Live ship tracking showed, suggesting that the lifter of the oil has still not found a place to put it.

Until last week, Kurdish oil exports were constrained to a small volume shipped by truck to two Turkish ports on the Mediterranean. Iraq's state marketer made threats of legal action but did not follow through.

But the start of exports out of the Kurdistan's pipeline means much more significant revenues for the region. Iraq swiftly announced that it filed an arbitration case against Turkey with the International Chamber of Commerce, Reuters added.

It also asked its customers to confirm they would never buy exported Kurdish oil, which they have done, an industry source with knowledge of the matter said.

In an effort to lock down the whole process of loading a tanker, Iraq's state marketer SOMO told inspections company, Netherlands-based Saybolt, to cease analyzing Kurdish crude, industry sources with direct knowledge of the matter said.

Saybolt management could not immediately be reached for comment.

Iraq and Kurdistan were trying to reach a political agreement over the oil sales, but five months after the pipeline started up there had still been no final decision, prompting the Kurdish Regional Government to go it alone, Reuters concluded.

"There is no going back," KRG's Prime Minister Nechirvan Barzani said this week in parliament. "If we cannot reach a shared understanding, we have other options and we cannot wait forever. Why did we begin selling oil? In order to make Baghdad realize that we can do it."

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