Canadian court authorizes seizure of ship carrying oil from Kurdistan

A court in Canada has issued a warrant for the seizure of hundreds of thousands of barrels of oil reportedly originating from the Kurdistan Region in a tanker recently seen off North America's eastern seaboard.

A court in Halifax, Canada, has recorded a “warrant for the arrest of the cargo of [approximately] 721,915 barrels of crude oil abroad the M/T [motor tanker] Neverland,” on June 29, 2017. The plaintiff is the ‘Republic of Iraq et al’ and the defendant is ‘The Ship M/T Neverland et al.’

“The Italian-flagged Neverland departed Ceyhan on June 13 with more than 700,000 b/d, destined for Augusta, Italy, but it turned off its transponder on June 21 just past Gibraltar, heading toward the Atlantic Ocean,” according to the UK-based S&P Global Platts, a provider of commodity information.

Automated Identification System (AIS) detected the ship’s location on Friday at approximately 300 miles off the Canadian coastal city of Halifax and approximately 600 miles off of the US coastal city of Boston as reported by The Financial Times.

The Kurdistan Region sends oil through a pipeline connected to Turkey’s Ceyhan port to world markets.

The Kurdish Minister of Natural Resources Ashti Hawrami told Reuters on Thursday that the Kurdistan Regional Government (KRG) sells its crude oil on a “free-on-board” basis and is not directly involved with the final buyers of their product.

“A senior Iraqi Oil Ministry official told S&P Global Platts that the ministry has been authorized to challenge the legality of the shipment and any other tankers, marking increased tension following recent warming between Baghdad and Erbil,” S&P Global Platts reported in a statement on Tuesday.

Hawrami responded that "We don't have any intention of upsetting Baghdad. Our policy is to discuss and solve problems and not to create new obstacles."

Although crude oil exports from the KRG have been delivered to other places, the Neverland would be the first to voyage across the Atlantic since the United Kalavryta’s attempt to deliver oil to America in 2014, Bloomberg reported.

Baghdad and Erbil have been in dispute over the Kurdistan Region’s share of oil revenues since early 2014 when the then Iraqi government under former Prime Minister Nouri al-Maliki cut the Region’s budget over the prospect of independent exports of Kurdish oil to international markets.

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