Baghdad threatens legal action against KRG over oil exports

The Iraqi Oil Ministry has indicated it is prepared to challenge the Kurdistan Regional Government’s (KRG) oil exports, notably the Neverland tanker which was reportedly on route to the US earlier last week.

In an about-face, Iraqi Prime Minister Haider al-Abadi is purportedly reconsidering allowing the Kurdistan Region to unilaterally export crude oil following news of the 700,000-barrel tanker making its way to the US.

Baghdad declared its readiness to challenge the legal validity of Kurdish oil exports in American courts according to a new report by S&P Global Platts.

A senior Iraqi oil ministry official added the ministry would challenge the legality of any shipments originating from the Region.

“The Iraqi government prevented three years ago such a cargo to the US by a judicial authority in the US,” the official said.

The ministry official was referring to the Kurdish cargo on the United Kalavryta, which had been destined for Galveston, Texas, back in 2014.

“It is a challenge [to us], and we will challenge that,” they added.

Back then, the KRG was blocked from unloading its cargo following a Houston federal court decision upon a lawsuit filed by the Iraqi government.

The KRG withdrew its appeal to Baghdad’s legal challenge in September 2015, as the fight against the Islamic State (IS) became the main focus in the nation.

Following the cut of Kurdistan’s share of the federal budget by Baghdad, the Region began exporting crude oil independently, a move strongly opposed by the Iraqi government.

Erbil has argued for years it remains under-compensated for its petrol assets.

However, Baghdad maintains the Iraqi oil ministry must approve oil exports from the Kirkuk field despite it being administered by the KRG.

Tensions between Erbil and Baghdad have been heightened in recent weeks as the war in Mosul against IS winds down, and the Kurds prepare for a referendum on independence scheduled for September.

The Italian-flagged Neverland departed Ceyhan on June 13 destined for Augusta, Italy, but turned off its transponder on June 21 just past Gibraltar.