US Says Policy on Kurdish Oil Sales Remains Unchanged

WASHINGTON DC – The US State Department said Tuesday that Washington’s policy towards the Kurdistan Region’s oil exports and sales remain unchanged, despite the war in Iraq and a US judge’s decision to quash an order to seize Kurdish oil from a tanker in US waters.

Iraq lost a case filed in a US court asking for the Kurdish crude to be seized on grounds it was illegally exported, after a District Judge threw out the case.

“Well, we have of course seen the reports (about the court decision),” State Department Spokesperson Jen Psaki said.

“Broadly, I would refer you to the parties involved. As you know, this is a commercial transaction. The United States Government is not involved,” Psaki said at the State Department’s daily briefing. 

"Our position hasn’t changed. It’s been clear and consistent," she added.

The US has refused to recognize the KRG’s oil sales and consistently has urged Erbil and Baghdad to find a common mechanism for Kurdish oil exports. 

One US worry is that control over oil exports and income would embolden Kurdish aspirations of independence.

According to media reports, the White House has pressured foreign governments to reject any tanker carrying Kurdish oil without authorization from Baghdad.

On Monday however, US district judge in Houston, Gray Miller threw out a case filed by the Iraqi government against a Kurdish oil tanker, saying, ““Kurdistan’s unauthorized export of oil over land -– and later overseas –- may violate Iraqi law, but it does not violate U.S. maritime law,” 

The KRG Minister of Natural Resources, Ashti Hawrami, welcomed the Texas court ruling, saying, “We are pleased with yesterday’s events. The ruling of the Texas court should give confidence to buyers of Kurdistan crude oil in the US and elsewhere.”

Hawrami added: “We hope that yesterday’s ruling marks the end of MoO’s efforts to interfere with the economic rights of the Kurdistan Region. The KRG legally produces, ships, exports, and sells oil in accordance with the rights of the Kurdistan Region as set forth in the Iraqi constitution and embodied in international law.”

Asked about US policy towards the oil sale despite recent events, including the Islamic State’s (IS/ISIS) attack on the Kurdistan Region and Baghdad’s refusal to make budget payments to the KRG, Psaki said: “I would say from our view the situation over the past several weeks clearly demonstrates why it’s incumbent on all sides to find resolution to this issue.”

The KRG and Baghdad have been at loggerheads for the past several years over authority to sell Kurdish oil. Each party claims to have full sovereignty over oil produced in the Kurdistan Region.

According to Kurdish officials, the KRG will be able to export at least 200,000 barrels per day (bpd) by the end of this month, with the installation of new boosters at the Fishkhabur station in its final state.

Psaki urged Erbil and Baghdad to resolve the oil issue, which continues to dominate the current negotiations between the Kurdish delegation in Baghdad and the new Iraqi Prime Minister-designate Haider al-Abadi.

“We continue to urge the Iraqi federal government and the Kurdistan Regional Government to reach agreement on how to best manage energy resources moving forward,” Psaki said.

In mid-August, a seventh tanker carrying Kurdish oil departed the Turkish port of Ceyhan, loaded with piped Kurdish oil. According to the Turkish Energy Minister Taner Yildiz, the KRG has exported 7.8 million barrels of oil through its independent pipeline to Ceyhan.  

Kurdish leaders see the exports through Turkey as the lifeline of the autonomous region. Ankara has signed a long-term multi-billion dollar energy package with the KRG that includes building another pipeline and exporting gas to energy-poor Turkey in coming years.