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ISIS Oil Trade Full Frontal: "Raqqa's Rockefellers" and the Israel Connection

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At an Erbil oil refinery, the Kurds stand guard


ISIS Oil Trade Full Frontal: "Raqqa's Rockefellers", Bilal Erdogan, KRG Crude, And The Israel Connection


Zero Hedge
By Tyler Durden
29 November 2015

"Effectively, we have been financially discriminated against for a long time. By early 2014, when we did not receive the budget, we decided we need to start thinking about independent oil sales”

- Ashti Hawrami, Kurdistan’s minister for natural resources

In June of 2014, the SCF Altai (an oil tanker) arrived at Ashkelon port. Hours later, the first shipment of Kurdish pipeline oil was being unloaded in Israel. “Securing the first sale of oil from its independent pipeline is crucial for the Kurdish Regional Government (KRG) as it seeks greater financial independence from war-torn Iraq,” Reuters noted at the time, adding that “the new export route to the Turkish port of Ceyhan, designed to bypass Baghdad's federal pipeline system, has created a bitter dispute over oil sale rights between the central government and the Kurds.”

A week earlier, the SCF Altai received the Kurdish oil in a ship-to-ship transfer from the The United Emblem off the coast of Malta. The United Emblem loaded the crude at Ceyhan where a pipeline connects the Turkish port to Kurdistan.

The Kurds’ move to sell crude independent of Baghdad stems from a long-running budget dispute. Without delving too far into the details, Erbil is entitled to 17% of Iraqi oil revenue and in return, the KRG is supposed to transfer some 550,000 bpd to SOMO (Iraq’s state-run oil company). Almost immediately after the deal was struck late last year, Baghdad claimed the Kurds weren’t keeping up their end of the bargain and so, only a fraction of the allocated budget was sent to Erbil during the first five months of the year.

This was simply a continuation of a protracted disagreement between Erbil and Baghdad over how much of the state’s crude revenue should flow to the KRG. For its part, Iraq has threatened to sue anyone that buys independently produced Kurdish oil. For instance, when The United Kalavrvta - which left Ceyhan last June - prepared to dock in Galveston, Texas a month later, a SOMO official told Reuters that Iraq’s foreign legal team was “watching closely the movement of the vessel and [was] ready to target any potential buyer regardless of their nationality.”

You get the idea. Erbil wants a bigger piece of the pie, Baghdad doesn’t want to give it to them, and so some time ago, the KRG decided to simply cut the Iraqi government out and export crude on its own. The dispute is ongoing.

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