A $100-million bonanza of crude oil sits in a tanker off the coast of Galveston, Texas, but moving it to shore has become a knotty foreign policy problem.
Late Monday, a federal court ordered U.S. marshals to seize the cargo of the tanker, the United Kalavrvta, if its more than 1 million gallons of crude oil is brought ashore. The oil is claimed by both Baghdad and the Kurdistan regional government, nominally part of Iraq but locked in an uneasy embrace, especially when it comes to who benefits from oil revenues.
Iraq is divided among Shiite and Sunni Muslims and the Kurds, who have all been fighting over the shape of the new government amid a bloody civil war prompted by the success of the Islamic State. The Kurds have been assertive, particularly about oil revenues, even as the central government has focused on the fighting between Shiites and Sunnis.
“The issue is not just a tanker, not just one shipment of oil, not just the Kurdish enclave in Iraq,” said Anthony Cordesman, the Arleigh A. Burke Chair in strategy at the Center for Strategic and International Studies, a Washington think tank. “We are talking about major issues, about the stability of Iraq and major exports of oil from the Mideast.”
Over the weekend, the tanker United Kalavrvta, flying the flag of the Marshall Islands, arrived off the Port of Galveston. The tanker has stayed between 30 and 60 miles offshore, and smaller ships would be needed to move the oil to the mainland, Coast Guard Petty Officer Andy Kendrick told the Los Angeles Times.
The Coast Guard began its usual safety check of the vessel, Kendrick said, but also contacted the State Department, the Department of Homeland Security and the National Security Council for guidance. Washington backs Baghdad’s claim to be the sole recipient of oil revenues, but it is also unhappy with Iraqi Prime Minister Nouri Maliki and how he has handled the war against Islamic State, formerly known as the Islamic State of Iraq and Syria, which has declared an Islamic caliphate in the territory it controls.
Speaking at a State Department briefing on Friday, deputy spokeswoman Marie Harf said U.S. policy toward Kurdish oil sales has been constant.
“Iraq's energy resources belong to all of the Iraqi people. The U.S. has made very clear that if there are cases involving legal disputes, the United States informs the parties of the dispute and recommends they make their own decisions,” she said.
The Coast Guard has completed its checks and, as far as it was concerned, the tanker could offload its product whenever it wanted, Kendrick said on Tuesday. The courts, however, said otherwise.
According to papers filed in the U.S. District Court for the Southern District of Texas, Galveston Division, the Ministry of Oil of the Republic of Iraq claims it is the sole owner of the oil because that country’s constitution guarantees that all oil, wherever it is produced in Iraq, “belongs to the people of the Republic of Iraq.” The Ministry of Oil “must approve the storage, transport, export or sale of any oil products belonging to the people of the Republic of Iraq, including the crude oil contained in the subject cargo.”
The oil on the tanker was drilled from wells in Kurdistan and, in December 2013, was pumped through a pipeline to Ceyhan in Turkey, Iraq says in its court papers. Iraq ordered that the oil be held but, instead, the Kurds loaded it on the United Kalavrvta.
The tanker left Ceyhan on June 23, designating Augusta, Ga., as its port of call. That was later changed to Galveston, according to the court papers.
And there the oil sits, for now.
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