A US judge ordered the seizure of more than $100million of oil stored in a tanker located offshore Galveston, Texas.
The move came after the Iraqi Oil Ministry raised a complaint, saying the expensive cargo was illegally pumped from wells in Kurdistan and transported through a hotly disputed Turkish pipeline.
According to the complaint, Kurdish officials “misappropriated” more than one million barrels from Northern Iraq.
US Magistrate Nancy Johnson ruled in the council’s favour, paving the way for US marshals to seize the $100million cargo and store the haul onshore at the Iraqi government’s own expense until the oil dispute is officially resolved.
The order stopped short of confiscating the United Kalavrvta, the Marshall Islands-flagged tanker.
The dispute over oil production began in December last year after the Kurdish officials began exporting oil through Turkey. Kurdistan has long since fought to be recognised as an independent region operating separately from Iraq and oil revenues from the country’s northern fields could play a crucial role in its plight.
However, the US officially recognises Kurdistan to be part of Iraq. Independent experts said a decision to accept the shipment would have been perceived as a sign to the rest of the world that it was acceptable to do business with the Kurdistan government.
The crude shipment left Turkey on June 23 changing course several times before arriving off the coast of Texas.
The Iraqi government warned Kurdish officials to stop illegal exporting through Turkey, which began in December, according to the complaint.
There are an estimated 45trillion barrels of oil reserves contained in the area controlled by the Kurdistan Regional Government. The government strengthened its stronghold in June after the Kurdish Peshmerga armed forces took control of northern Iraq’s key oil hub, Kirkuk.