Sixty miles off the coast of Texas sits a crude oil tanker fully loaded with years of antagonism between the Kurdish region of Iraq and the central government in Baghdad. The United Kalavrvta, a tanker the length of three football fields, began its journey in the Turkish port of Ceyhan, where it picked up a million barrels of crude oil that had come by pipeline from the Kurdish region of Iraq. Then it set sail for Gibraltar before heading toward Galveston. It never got there. The central government of Iraq, despite recent military setbacks, dispatched its American lawyers at Vinson & Elkins to do battle in the U.S. District Court of southern Texas, where a judge ruled that the tanker cargo, worth about $100 million, should be seized if it came within Texas state waters. The core of the dispute: the Iraq oil ministry’s lawyer Phillip B. Dye argued that the crude cargo belongs to the Baghdad ministry of oil and that it was never the Kurdistan Regional Government’s. But Michael Howard, an adviser to the Kurdish minister of natural resources, said in an interview that “it’s a constitutional issue that should be determined in Iraq and shouldn’t be exported to U.S. courts.” The drama last week in Texas is just part of a global play being made by the Kurdistan Regional Government, which is desperately seeking money in the midst of turmoil of Iraq. The Kurds, many of whom have long sought an independent state, say that the central government in Baghdad has stopped providing the northern region with its share of the national budget. And without the ability to sell their own oil, Kurdish officials argue that they cannot protect themselves from violent militants or provide government resources. On Sunday, Sunni extremist militants seized three Kurdish towns, sending thousands of Kurds fleeing on foot. But if the Kurds can sell their own oil, they would also be potentially securing the financial base they need to finally declare their independence. At stake is the American goal of a unified Iraq, and the Obama administration is stuck in the middle of the dispute. Having invested tremendous effort into securing Iraqi federalism and its constitution, which says that oil belongs to the entire republic, the administration has been discouraging companies and countries from buying the Kurdish oil cargoes. Revenue sharing accords in Iraq are supposed to provide 17 percent of Iraqi oil revenues to the Kurdistan Regional Government. U.S. officials believed they had brokered an agreement between the Kurds and Baghdad in March, and they were unhappy when it fell apart, according to State Department officials who spoke on condition of anonymity because they were not authorized to speak. Then the Kurdistan Regional Government worked out a deal with Turkey so it would load the tankers. Iraq said Turkey’s agreement to load Kurdish oil violates accords between the two nations. The United Kalavrvta is one of five tankers that have been loaded with Kurdish crude oil at the port of Ceyhan since late May. One delivered its cargo in Israel, with rumors of deep discounts. Another, the United Emblem, which like the United Kalavrvta belongs to a Greek firm called Marine Management Services, is currently in the Strait of Singapore (see image below); Reuters reported that it transferred its cargo at sea to an unidentified tanker last week. Still another tanker, the Kamari, just left Ceyhan last Friday and was heading for Egypt’s Port Said. Read full article
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