A tanker loaded with one million barrels of Kurdish oil may escape seizure from the U.S., as it sits far enough off the shore of Texas to be out of the jurisdiction of the court that ordered U.S. Marshals to seize it.Yesterday, a Texas judge ordered the seizure after the central Iraqi government sought legal recourse for what it sees as a kind of rogue sale. The semi-autonomous region of Iraqi Kurdistan has been exporting crude via Turkey in recent months, and loading that oil onto tankers on Turkey’s Mediterranean coast. Baghdad has vigorously disputed these actions, keen to keep the Kurds under the umbrella of the central government, and yesterday seemingly won a victory against the Kurdistan Regional Government (KRG) in the Texas court. But as Reuters reports, the ship’s cargo may survive to be sold another day:
A U.S. judge said on Tuesday her court “has no jurisdiction” over a tanker near Texas loaded with Kurdish crude oil because it is some 60 miles offshore, meaning the order she issued earlier to seize the $100 million cargo cannot be enforced at this time.
What happens next is anybody’s guess, but Iraq has already threatened any companies that buy Kurdish crude with retaliation. Meanwhile, this isn’t the only tanker laden with Kurdish crude to be denied a buyer; one tanker has been floating listlessly off the coast of Morocco for nearly two months, while another waits idly in Malaysia. Lacking buyers, the KRG has stopped loading crude onto tankers in the Turkish port of Ceyhan, and as a result has taken to filling storage tanks there. But now, those tanks are all full, and the newly-functional pipeline that carries Kurdish oil north to Turkey has been shut off.This is a stand-off with big implications. The KRG sees crude exports as its ticket to greater autonomy and even independence from Iraq, an eventuality that Baghdad is desperate to prevent. And, with a recent Goldman Sachs report predicting that Kurdish oil production will double next year, the stakes get even higher.