The Burning Question of Oil in Iraq

Posted by PortVision

As the nation of Iraq threatensunited-kalavyrta-coast-guard to break apart into separate ethnic-based regions, the burning question (literally) is who owns the oil in those areas? The militant group ISIS has captured the largest oil field in Syria and controls northwestern Iraq and now the Kurds in northeastern Iraq control areas such as oil-rich Kirkuk.

The Iraqi government claims the area the Kurds hold is part of Iraq and therefore all resources belong to it. However, the Kurds control the oil and they want to take advantage of this lucrative source of income by way of exporting to foreign countries.

 Currently under scrutiny is the case of the Piraeus, Greece-based, Marine Management Services M.C.- owned United Kalavryta oil tanker carrying one million barrels of Middle Eastern oil worth $100 million that is currently located in the Gulf of Mexico near Texas. 

The oil in question comes from the Kurdish area which is or was a part of Iraq. And as far as the Kurdistan Regional Government (KRG) is concerned, they have the right to sell the oil as Bagdad continues to withdraw financial budgetary support

Recently, the Bagdad government urgently requested U.S. lawmakers step in and have local authorities seize the cargointended to be offloaded at Galveston. A U.S. District Court, Southern District of Texas Court judge initially granted the seizure, then retracted the ruling because the United Kalavryta is positioned outside the 12-mile offshore U.S. jurisdiction area. The judge, instead, asked the two parties to settle their dispute in an Iraqi court of law.

The vessel could possibly sail to a different American port and try to unload its cargo there. While the U.S. government has not yet officially prevented U.S. companies from purchasing oil from the KRG, it highly dissuades buying from the semi-autonomous entity, considered in major military and political flux, as doing so could end up causing companiesa host of legal issues.

 Meantime, oil prices are risingin the wake of continued unrest in the Middle East. Iraq is one of the top five countries that import oil to the U.S. and is also one of the top producers of oil in the Organization of the Petroleum Exporting Countries (OPEC), which encompasses 12 nations that include Kuwait, Iran and Nigeria.  

No doubt the Iraqi government will be trying to keep close track of the United Kalavryta’s movements as it continues to lay claim to her cargo. 

Knowing the origin and destination of such a politically contentious commodity as carried by United Kalavryta is critical insight for many global governments.  PortVision subscribers in the commodities trading and intelligence areas routinely use PortVision data and AIS ship tracking to increase their understanding of global commerce and related vessel activities. You can learn more about PortVision’s reporting, analytics, and historical playback capabilities here

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Posted on Aug 11, 2014, 1:48:00 PM

Topics: Blog