Tanker with Iraqi Kurdish Oil Anchors off Texas Port

By Joseph R. Fonseca
Monday, July 28, 2014
Tanker with Iraqi Kurdish oil anchors amidst concerns


A tanker carrying crude oil from Iraqi Kurdistan was anchored near the Port of Galveston, Texas, and must undergo a routine safety inspection by the U.S. Coast Guard on Sunday before it can unload its cargo, an official said.

The Marshall Islands-flagged tanker United Kalavrvta sailed from the Turkish port of Ceyhan in June bound for the U.S. Gulf Coast despite Washington's concerns over independent oil sales from the autonomous region and threats from the Iraqi central government.

Crude offloading could begin as early as Sunday, if the tanker passes the Coast Guard inspection "and there are no other issues," said Coast Guard Petty Officer Andy Kendrick.

The Coast Guard was communicating with the U.S. National Security Council, State and Homeland Security departments about the vessel's arrival and status, Kendrick said.

The United Kalavrvta received the oil at Ceyhan from a new Kurdish pipeline.

The ship is too large to move through the Houston Ship Channel, which begins at Galveston, the Coast Guard has said. The United Kalavrvta will have to offload its cargo onto smaller ships offshore before the oil is delivered to the U.S. mainland.

Trading sources in Texas, New York, London and Geneva have been unable to identify the buyer of the United Kalavrvta's cargo. The oil could go to any one of the many refineries located along the U.S. Gulf Coast.

The ship carries approximately 1 million barrels of crude, which would fetch more than $100 million at international prices.

Any sale of Kurdish crude oil to a U.S. refinery would infuriate Baghdad, which sees such deals as smuggling, raising questions about Washington's commitment to preventing oil sales from the autonomous region.

The U.S. Government has expressed fears that independent oil sales from Kurdistan could contribute to the breakup of Iraq as the government in Baghdad struggles to contain the ultra-hardline Islamic State, a group of Sunni Islamist insurgents who have captured vast areas of the country.

But it also has grown frustrated with Iraqi Prime Minister Nuri al-Maliki's handling of the crisis.

Washington has pressured companies and governments not to buy crude from the Kurdish Regional Government (KRG), but it has stopped short of banning U.S. firms from buying it outright.

The KRG has renewed its push for an independent state amid the latest violence roiling Iraq. Its relationship with Baghdad has deteriorated over what it sees as Maliki's role in stoking the crisis and the long-running dispute over oil sales.

Baghdad has threatened to sue anyone that buys Kurdish oil.

(Additional reporting by David Sheppard in London, editing by David Evans)

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