(Adds tanker movements)
By Terry Wade
HOUSTON Aug 26 A tanker loaded with $100
million of Kurdish crude oil cannot be delivered in Texas soon
because of risks for buyers as Iraq mulls further legal
challenges, so a month-long standoff will drag on, a source
close to the matter said on Tuesday.
A U.S. court on Monday threw out an order to seize the 1
million barrel cargo from the United Kalavrvta tanker in the
Gulf of Mexico, after acknowledging it lacked jurisdiction
because the ship is beyond U.S. territorial waters, about 60
miles (97 km) offshore.
But the court did not settle the broader dispute between
Iraq and the Kurdistan Regional Government (KRG) over who has
the sole right to export the crude, a feud Washington has
struggled to mediate as it backs a unified Iraq that can resist
Buyers of Kurdish crude could face lawsuits from Baghdad if
the oil moves close to U.S. soil and would also require the
seller to provide costly indemnities against potential lawsuits,
the source added.
"I think we're going to be in a bit of a standoff for a
while," the source said. "Right now they don't really have a way
to get the oil onshore."
Despite the court's ruling, cargo handling companies and a
would-be buyer balked at bringing the oil ashore on Tuesday.
U.S. refiner LyondellBasell, when asked if it would
receive the cargo as planned at its Houston plant, reiterated
that: "(We) will not accept delivery of any of the affected
crude until the matter is appropriately resolved." Earlier this
year, the company received Kurdish crude cargoes.
In another sign of possible delays, not one cargo handling
company stepped forward to say it would transfer oil from the
United Kalavrvta tanker to smaller ships that can fit into the
port of Galveston, the U.S. Coast Guard said.
Axeon Specialty Products earlier this month refused delivery
of Kurdish crude at its Paulsboro, New Jersey, refinery.
Baghdad and the KRG have been locked in litigation, both in
the United States and Iraq, over who can sell the crude. More
legal action is likely after the U.S. judge on Monday said Iraq
could amend its complaint, a move Iraq is mulling.
The Kurds have claimed the right to sell oil under Iraq's
constitution, while Baghdad says it must manage all crude sales.
The Kurds say control over natural resources is crucial for
their dreams of independence and because Baghdad has responded
weakly to militants who have overrun parts of the country.
Washington has refused to intervene in commercial sales,
saying the oil belongs to all Iraqis, while warning companies
about the legal risks of dealing directly with Kurdistan.
KURDS PRESS ON
Despite marketing and legal tangles, Kurdish authorities
have continued trying to get their crude to market and loaded
additional tankers at the Turkish port of Ceyhan.
One tanker, the United Dynamic, is headed to Ceyhan now.
Reuters ship tracking data shows the 1 million barrel Suezmax
tanker - managed by the same firm as three other Kurdish tankers
- would arrive there on Wednesday.
The United Emblem tanker, which has also delivered Kurdish
crude, was moored just outside Ceyhan having returned from a
delivery in Asia.
So far the Kurds have delivered at least four major cargoes
of crude oil carried to Ceyhan on its new
Several others have been blocked from delivering. The United
Leadership, the first vessel of Kurdish crude to sail from
Ceyhan, has been moored off Morocco with a full cargo for more
than two months.
The tanker that was turned back in New Jersey, the Minerva
Joy, is now headed to Cyprus, an important trading hub.
(Reporting by Terry Wade; Editing by Anna Driver and Lisa