WASHINGTON – A U.S. judge’s order to seize some $100 million in Kurdish oil inside a tanker off of Galveston, Texas, underscores the intention of the Kurdish population in northern Iraq to seek independence as it reflects the potential for Iraq’s breakup as a cohesive country comprised of Shiites, Sunnis and Kurds.
Iraq petitioned the U.S. court to make the seizure, claiming that the Iraqi government is the central authority of the country, that all oil exports must have Baghdad’s approval and that only it can sell and distribute Iraqi oil.
Because the United States supports that position, the U.S. Department of Homeland Security, State Department and Coast Guard were called into action, according to informed sources.
The ship either has yet to come into port, or it could sail off to another destination. If the tanker docks, the oil will be seized.
At this writing, the ship is anchored some 60 miles from Galveston outside U.S. territorial waters.
According to Jen Psaki, spokeswoman for the U.S. Department of State, the U.S. government is following the dispute closely.
“We believe that Iraq’s energy resources belong to the Iraqi people and certainly have long stated that it needs to go through the central government,” she said.
Such a statement makes it clear that the shipment would be seized if it were brought to a U.S. refinery.
On the other hand, if the shipment were to proceed to a refinery and there was no seizure, it could be interpreted as a signal that the U.S. government concedes that the Kurdish region, which Kurds refer to as Kurdistan, is separate from Iraq.
Not only Iran backs that position, but Turkey opposes it since Ankara has been attempting to negotiate its own oil deals with the Kurds. The Turks have sought to load Kurdish oil at their port of Ceyhan, which then bypasses the approval of the central authority in Baghdad.
The crude oil shipment subject to seizure off of Texas was loaded in the Turkish Ceyhan port on June 23 and had “changed destinations multiple times” while at sea, according to the Iraqi court filing.
The Kurds control the northern portion of Iraq, which includes major oil production. Following the invasion of the Sunni extremist group Islamic State, which swept through western and central Iraq out of Syria to create its Islamic State caliphate, the Kurds took advantage of the occasion with Baghdad fighting the jihadists to acquire more territory that includes the oil production region around Kirkuk.
The Kurds decided to deal with U.S. energy firms on the Gulf Coast. In the meantime, the Kurds and the Turks are attempting to put more pressure on the U.S. government to allow the sales in recognition that Iraq no longer is a cohesive country, that the Kurds in Iraq have established de facto independence and that the central government of Shiite Prime Minister Nouri al-Maliki no longer has control over the country.
The country’s leadership is embroiled in its own fight to reconstitute the government to be more inclusive of Sunnis and Kurds under a central authority.
Maliki has been resisting such calls, including demands that he step down to allow someone more acceptable to all sides to be prime minister.
Analysts say that Maliki’s lack of inclusiveness especially of Sunnis in his government, contributed to the rise of the Islamic State, with Sunni groups in the Sunni-controlled portion of the country assisting the Islamic State in including it and declaring its caliphate subject to strict Shariah law.
Instead of actually seizing the shipment on board the Marshall Island-flagged tanker United Kalavrvta, the Iraqi Oil Ministry in an arrest warrant asked that the oil be stored onshore at Iraq’s expense.
Oil experts say that the tanker is too large to enter the Houston Ship Channel to offload the cargo directly. The U.S. Coast Guard did give clearance for the tanker to proceed for oil offloading if that decision is made.
In legal papers filed in Houston federal court, the government of Iraq said the oil was its property, saying it holds title and possession to the oil, a claim that could be challenged in court by the company AET, which entered into the original contract with Talmay Trading, a British Virgin Islands-based company.
AET is a Kuala Lumpur-based company and filed its request in Houston federal court along with Dallas-based AET Offshore Services, Inc.
The Kurdistan Regional Government estimates that the northern territory of Iraq potentially holds some 45 billion barrels of oil.