Kurdish oil tanker turns back after legal challenge

An oil tanker shipping crude from Iraq’s semi-autonomous Kurdish region turned back after getting almost 320 kilometres across the Atlantic Ocean, amid a challenge over the shipment’s legality.

The United Leadership, able to haul 1 million barrels, signalled that it was about 8km off Mohammedia in Morocco at about 6pm local time on Monday, according to information entered by the ship’s crew and captured by Coulsdon, England-based IHS Maritime. It turned back on Friday after getting about 300km west of Gibraltar, at which point it was sailing to the US Gulf. The shipment is illegal, Somo, Iraq’s oil marketing company, has said.

The tanker “has arrived at its destination”, Kurdish news website Rudaw reported, citing Safeen Dizayee, a spokesman for the Kurdistan Regional Government. Rudaw did not specify the destination.

“There will be a lot of attention focused on where that tanker heads because it is potentially a milestone, the first cargo,” said Richard Mallinson, an analyst at Energy Aspects in London.

“That would discourage any potential buyers. It may also limit the Kurds’ options, it may force them to accept discounts on the price that they can sell for.” Three calls to the KRG’s natural resources ministry were not answered and an email was not returned. United Leadership is owned by Marine Management Services, according to a database IHS maintains for the United Nations shipping agency. Four calls to the company’s offices in Piraeus, Greece were not returned and the line went dead when Bloomberg News asked for an email address for Marine Management’s directors.

The KRG estimates its region has about 45 billion barrels of crude reserves. Iraq itself has about 150 billion barrels. A dispute between the two sides escalated last month when the Kurds began pumping oil through their own pipeline to Ceyhan, the Turkish port in the Mediterranean Sea from where ship tracking data shows United Leadership loaded its cargo.

Iraq said last month that it sought arbitration over Kurdish oil sales at the International Chamber of Commerce. Some said that buyers should not purchase the cargo. The KRG says it is abiding by the Iraqi constitution, according to its website. Shipping signals can be inaccurate because much of the information is entered manually and because not all data are captured.

“Nowadays, due to technology, it has become easy to track any shipped oil and anyone who will deal with this oil may face problems,” said Asim Jihad, a spokesman for Iraq’s oil ministry.

Disputes about cargoes sometimes delay merchant ships. A tanker called the ETC Isis spent months marooned off Singapore in 2012 as part of a dispute between northern and southern Sudan. Earlier this year, US special forces boarded a tanker shipping crude from eastern Libya that the nation’s government said was illegally shipped.

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