Iraq Lays Claim to Kurdish Crude Cargo

Iraq filed suit on Monday in a Texas court to gain control of a cargo of crude oil from Iraqi Kurdistan that Baghdad says was sold without its permission.

The United Kalavrvta tanker, carrying some 1 million barrels of crude worth about $100 million, arrived off the coast of Texas on Saturday but has yet to unload its disputed cargo.

The ship, which is too large to enter the port of Galveston near Houston, was given clearance by the U.S. Coast Guard on Sunday to transfer its cargo offshore to smaller boats that would deliver it to the U.S. mainland.

Iraq, in its filing in U.S. District Court for the Southern District of Texas, asked for an order allowing the cargo to be seized by the U.S. Marshals Service.

Sale of Kurdish crude oil to a U.S. refinery would infuriate Baghdad, which sees such deals as smuggling.

The U.S. State Department has expressed fears that independent oil sales from Kurdistan could contribute to the breakup of Iraq, said the oil belongs to all Iraqis, and warned potential buyers of legal risks.

But it has also made clear it will not intervene in a commercial transaction.

AET Offshore Services, a company in Texas hired to unload the tanker, asked in a separate court filing in U.S. district court on Monday if Iraq's claims were valid.

The court filings did not name the end-buyer of the cargo. AET Offshore is an intermediary.

Piecemeal oil exports have gone from Iraqi Kurdistan to Turkey and Iran by truck in the past, which Baghdad also opposed. But the opening of a new pipeline to Turkey earlier this year, which could supply the Kurds with far greater revenues, has met much fiercer opposition from Baghdad.

One cargo of Kurdish crude was delivered in Houston in May to an unidentified buyer, and four other cargoes of Kurdish crude have been delivered so this year in Israel.

The case is Ministry of oil of the Republic of Iraq v. Ministry of Natural Resources of Kurdistan Regional Governate of Iraq et al, U.S. District Court, Southern District of Texas, No. 3:14-cv-00249