Efforts by Iraqi Kurdistan to boost its finances through bulk oil sales suffered a setback on Thursday as its main U.S. customer swore off more purchases and Baghdad vowed to block delivery from oil-laden vessels like one the Kurds were loading for export.
U.S.-based chemicals and refining company LyondellBasell , in its first comments on the controversy, said that after receiving previous shipments it was halting all purchases of what it called disputed Iraqi crude.
"We have cancelled further purchases and will not accept delivery of any of the affected crude until the matter is appropriately resolved," the company said in a statement about
crude for its Houston Refining unit.
The United Kalavrvta tanker, carrying some 1 million barrels of Kurdish crude worth $100 million, has been anchored off the coast of Texas since Saturday, stuck in a bitter legal row
between the semi-autonomous Iraqi region of Kurdistan and the central government of Iraq over who owns it.
The Kurds say control over their oil is crucial for their own dreams of independence and because Baghdad has responded weakly to Islamist militants who overran parts of the country in
Washington has refused to intervene in commercial sales, saying the oil belongs to all Iraqis and supporting a unified Iraq, while warning companies about dealing directly with
Kurdish authorities meanwhile made new efforts to get their crude to market on Thursday, loading another tanker at the Mediterranean Turkish port of Ceyhan even as three vessels
carrying their oil remained in limbo.
One of those ships, the United Emblem, offloaded part of its cargo onto another ship while anchored in the South China Sea about 12 miles (20 km) off the east coast of Peninsular
Malaysia. But it was still unclear who, if anyone, had bought the smaller cargo or its destination.
The third, the United Leadership, has been anchored off Morocco for almost two months. All three tankers are managed by Marine Management Services M.C., a Piraeus-based shipper that
has declined to discuss the fate of the vessels.
NEW CARGO LOADING
Despite the trouble that Kurds have moving crude to buyers, the ship being loaded at Ceyhan on Thursday was scheduled to sail.
The cargo was the first one of Iraqi Kurdish oil in over a month at Ceyhan, at the end of a pipeline running from Kurdistan to Turkey. The Suezmax tanker Kamari will carry one million
barrels of crude oil.
So far, most of the buyers of Kurdish oil remain anonymous, while the intensifying legal and political struggle with Baghdad could deter potential buyers, analysts say.
Arguing all oil sales outside its control are illegal, Baghdad this week got a U.S. court to order the seizure of 1 million barrels of oil from the United Kalavrvta if the cargo
comes ashore. But the tanker is outside the court's jurisdiction while it is not in U.S. territorial waters.
Lawyers for the Kurdistan Regional Government, in a letter seen, said they had legally sold that shipment.
Payments for such shipments are typically made some 30 days after delivery.
The Kurds say Baghdad has starved them of their share of national oil money. While the region has long aspired to independence, its position has grown stronger in recent months as Kurdish Peshmerga troops have out-performed Iraqi soldiers against Islamist militants.
Kurds have cemented their control of oil reserves around the resource-rich city of Kirkuk and sought to push for more autonomy as Iraqi Prime Minister Nuri al-Maliki, a Shi'ite Arab who has been an adversary of Iraqi Kurds, has fallen out of favor in Washington.