Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on May 16, 2014
Israel, US import disputed crude oil from Iraqi Kurdistan
The Iraqi government has repeatedly said oil sales bypassing Baghdad are illegal and has threatened to sue any company involved in the trade.
Israeli and U.S. oil refineries have joined the growing list of customers for crude from Iraqi Kurdistan, a region locked in a bitter struggle with the central government in Baghdad that says the sales are illegal.
The United States imported its first crude cargo from the region two weeks ago while at least four have gone to Israel since January, ship tracking and industry sources said, after two were shipped there last summer.
The Iraqi government has repeatedly said oil sales bypassing Baghdad are illegal and has threatened to sue any company involved in the trade, yet Kurdish crude and light condensate oil has been sold to several European buyers. Baghdad refuses to sell oil to Israel, echoing other Arab states.
Israel’s Energy Ministry declined to comment, saying that it does not discuss the country’s sources of oil.
A senior Iraqi oil ministry official said Baghdad had no information on the sales but was investigating.
“If these reports are correct, then dire consequences will be inevitable,” the Iraqi oil official said.
“This is a seriously dangerous development. We have always warned the region to stop smuggling Iraqi crude by trucks to Turkey…and now if this is proved true then they are going too far.”
An official of Kurdistan’s Ministry of Natural Resources said from the region’s capital Arbil: “The Kurdish Regional Government (KRG) has not sold crude directly or indirectly to such destinations.”
The stakes are high as Kurdistan’s independent oil sales allow it to receive income outside Baghdad’s budget, pushing it towards even greater autonomy.
Tensions reached a new pitch this week after Kurdistan’s president said Iraq had been led in an authoritarian direction by Prime Minister Nuri al-Maliki and threatened to end the region’s participation in the federal government.
The deals involve major international commodity traders, including Trafigura, one of the top three oil traders in the world, trading and shipping sources said.
A spokeswoman for Trafigura declined to comment.
The sales come as the KRG and Baghdad aim to complete long-running negotiations over a pipeline Arbil built to Turkey to circumvent the central government monopoly.
Arbil began pumping crude through to the Turkish port of Ceyhan on the Mediterranean in January but stopped short of selling it, under the threat of budget cuts from Baghdad.
Storage tanks are now nearly full with 2.4 million barrels, trading and shipping sources close to the matter said. Exports of this oil could start as early as later this month.
Tracking Shipments
Iraqi Kurdistan began selling its oil independently of the federal government in 2012 with a small trickle of condensate trucked through Turkey, followed by two types of crude oil.
Baghdad says only its state oil company is authorised to sell Iraqi crude, but both sides claim the constitution is on their side and with a crucial hydrocarbon law stuck in draft mode, there is room to manoeuvre.
A Turkish company called Powertrans is the broker for the Kurdish government, selling the oil via tenders to traders. Much of the crude has gone to Trieste, Italy while the condensate has gone to France, Germany, the Netherlands and even Latin America.
The tanker Marinoula discharged around 265,000 barrels of heavy sour Iraqi Shaikan crude oil at the Oiltanking terminal in Houston on May 1, shipping sources said and Reuters AIS Live ship tracking showed.
The identity of the buyer was unclear as the terminal is connected to 23 refining, production and storage facilities scattered between the Gulf Coast and Cushing, Oklahoma.
The crude was loaded by trading company Petraco at the Delta Rubis terminal at Dortyol in Turkey, one of two ports that export Kurdish oil, the sources said. The company declined to comment.
At least four cargoes laden with Kurdish crude went to Israel since the start of this year. Trading sources said that Israel’s Oil Refineries Limited’s (ORL) plant at Haifa ran some of it.
Paz Oil Company, owner of a refinery near Ashdod, bought at least two cargoes within the last 9 months, traders said.
A spokesman for ORL said “ORL purchases its crude oil from different sources in accordance with the refinery’s needs and market conditions.”
A spokeswoman for Paz denied the plant had used Kurdish crude.
Some Kurdish oil has also been simply stored, sources said.
Geneva-based trading company Mocoh lifted Shaikan crude from Dortyol in Turkey on the Baltic Commodore, which arrived in Ashkelon in Israel on Jan. 31, market sources and ship-tracking showed.
An official at the company said that “Israeli refineries are not necessarily using this crude,” but declined to elaborate.
Trafigura sent a cargo of Kurdish crude to Israel on the Hope A tanker, which went first to Ashkelon and then to Haifa between Feb 10-15.
The Kriti Jade loaded Kurdish crude in Turkey and then sailed to Ashkelon on March 3 and then Haifa a few days later, the sources and ship-tracking showed.
The second tanker, Kriti Sea, picked up Kurdish oil around March 5. The vessel then anchored off Limassol, Cyprus but did not discharge crude. Petraco lifted both cargoes.
Instead it left still laden and tracking was switched off between May 17-20 near the Israeli coast. When it reappeared, still close to Israel, the tanker was empty.
17 Comments on "Israel, US import disputed crude oil from Iraqi Kurdistan"
Plantagenet on Fri, 16th May 2014 10:27 am
Oil is fungible. Oil produced by any country and sold to a dealer can then be resold by that dealer to a third party. Once oil is sold, the seller can’t control what the buyer does with it.
Problem solved.
GregT on Fri, 16th May 2014 11:07 am
“Problem solved”
In your mind, perhaps.
Dave Thompson on Fri, 16th May 2014 12:54 pm
Anyone out there now doubt that the wars in the middle east that the US went into were not about oil?
Northwest Resident on Fri, 16th May 2014 1:38 pm
xx
“Anyone out there now doubt that the wars in the middle east that the US went into were not about oil?”
Chuck Hagel, current Secretary of Defense, in 2007:
“People say we’re not fighting for oil. Of course we are. They talk about America’s national interest. What the hell do you think they’re talking about? We’re not there for figs.”
Plantagenet on Fri, 16th May 2014 2:39 pm
Of course the wars were for oil. The clearest example of Obama’s air war on Libya. The oil shipments to the EU decreased and wham bam boom, the UK, the French (!) and the US suddenly started blowing people up in Libya.
Unfortunately Libyan oil shipments are lower now than when the US went to war. GO figure.
Plantagenet on Fri, 16th May 2014 2:41 pm
Of course the wars were for oil. The clearest example of this is Obama’s air war on Libya. The oil shipments from Libya to the EU decreased and wham bam boom, the UK, the French (!) and the US suddenly started blowing people up in Libya.
Unfortunately Libyan oil shipments are lower now than when the US started killing Libyans. GO figure.
J-Gav on Fri, 16th May 2014 3:20 pm
It is well-known that the Kurds have been moving oil to Turkey for some time – but without actually selling it (it was put in storage). Now that has apparently changed. This could open up a whole new phase in ethnic/regional conflict in Iraq (the Sunni-Shia rift already killing thousands every year).
Plant – Why the exclamation point after France? Philosopher/Media whore Bernard Henri-Lévi got President Sarkozy onto the ‘humanitarian’ air-strikes bandwagon without even trying. You see, at least one of Sarkozy’s campaigns was generously financed by Gaddafi (investigation still underway of course – and probably never to end). To be classed in the ‘serious rumor’ category is also the notion that French ‘services’ were also involved in the decision, planning and even execution of Gaddafi’s ‘fast exit.’
rockman on Fri, 16th May 2014 3:22 pm
Not sure how it works internationally but in the US oil has a title attached to it just like your car. That’s one way how the agencies tract oil movement. You transfer oil and that title is recorded. Helps to cut down on oil field theft…to a degree. Someone can still steal a load of oil from your tanks but with out a title they have to sell it illegally. Then it’s called a “hot oil sale”… really. They usually get about $.60 on the dollar.
But if I sell my oil to a buyer, he resells to a refinery and then there’s some legal issue (like maybe I didn’t pay the royalty his proper share or pay enough production tax) everyone in the chain of custody, as shown in a title search, can be liable. I have a suspicion that the dispute over the Kurd oil could end up in the international court. Any oil buyer could end up having to compensate the Baghdad gov’t.
ezrydermike on Fri, 16th May 2014 3:31 pm
I’ve heard this “oil is fungible” thing before. I don’t think this entirely true. Oil from different sources have different qualities including impurities and/or contaminants. for example, sulfur content. Lot’s of oil out here in CA has high sulfur. Pretty sure refining operations are tuned to the characteristics of the oil they received to process. So what exactly is “oil is fungible” supposed to mean?
fungible definition = being of such a nature that one part or quantity may be replaced by another equal part or quantity in the satisfaction of an obligation
Northwest Resident on Fri, 16th May 2014 3:46 pm
So what exactly is “oil is fungible” supposed to mean?
“fungible” is a word that I would expect Nony or one of his several sock puppets to use, but not the highly respected Obama-slamming commenter known as Plantagenet (unless he, too, is a Nony sock puppet, which couldn’t possibly be the case, could it???).
ezrydermike on Fri, 16th May 2014 4:11 pm
we have sock pupperts on the internet now?
D’OH!
Northwest Resident on Fri, 16th May 2014 4:24 pm
From Wikipedia: A sockpuppet is an online identity used for purposes of deception. The term, a reference to the manipulation of a simple hand puppet made from a sock, originally referred to a false identity assumed by a member of an Internet community who spoke to, or about, themselves while pretending to be another person.[1] The term now includes other misleading uses of online identities, such as those created to praise, defend or support a person or organization,[2] or to circumvent a suspension or ban from a website. A significant difference between the use of a pseudonym[3] and the creation of a sockpuppet is that the sockpuppet poses as an independent third-party unaffiliated with the puppeteer. Many online communities attempt to block sockpuppets.
ezrydermike on Fri, 16th May 2014 5:05 pm
trolls and sockpuppets.
What a world.
rockman on Fri, 16th May 2014 5:12 pm
Just to answer the question:
fun·gi·ble
adjective – especially of goods; being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.
Origin:
1755–65; < Medieval Latin fungibilis, equivalent to Latin fung ( ī ) to perform the office of
So concerning the aspect of individual oil compositions can one be "a little fungible"? Like being a little pregnant? LOL.
Northwest Resident on Fri, 16th May 2014 5:17 pm
I used to be a member of The Bad Astronomer forum, where physicists, astronomers, engineers and other people just interested in science-related issues hung out. They actively identified sock puppets on that site and banned them, with announcements that so-and-so member had been banned due to sock puppetry. I’m a web developer, very familiar with web technology, and it isn’t hard to identify a sock puppet from a technical point of view.
The sock puppets that normally got banned were those who were promoting some kind of weird or non-standard scientific or related argument, the others piled on to ruthlessly attack and destroy the ideas being put forth, and the individual would invent a sock puppet to come to his defense in terms of backing up his argument, or slamming another of the strong points of view against his own — that sort of thing. I suspect Nony uses the same methodology to 1) Disparage people on this site because of their belief that BAU is set to come to a grinding halt in the not too distant future, 2) To promote his own overly enthusiastic point of view that fracking and NG are the wave of the future for world energy needs and to 3) Still play games and participate in the discussion but as another poster who generally talks the same and has the same whacky sense of humor and still promotes the same general points of view as Nony. I could be wrong, but I doubt it. It is that same whacky sense of humor and the irrational enthusiasm for NG that ties about four of the posting names together on this site — just an observation. Whatever. Nony, wherever you are, I hope you’re doing just fine.
GregT on Fri, 16th May 2014 6:10 pm
The Bad Astronomer Forum? I like it! I’ll be sure to check that forum out.
Here I thought Nony and the Smurf had a monopoly on sock puppetry. I honestly had no idea that is was so commonplace. Chock up another one for bizarre human psychological behaviour.
MSN fanboy on Sat, 17th May 2014 2:41 am
From Wikipedia: A sockpuppet is an online identity used for purposes of deception. The term, a reference to the manipulation of a simple hand puppet made from a sock, originally referred to a false identity assumed by a member of an Internet community who spoke to, or about, themselves while pretending to be another person.[1] The term now includes other misleading uses of online identities, such as those created to praise, defend or support a person or organization,[2] or to circumvent a suspension or ban from a website. A significant difference between the use of a pseudonym[3] and the creation of a sockpuppet is that the sockpuppet poses as an independent third-party unaffiliated with the puppeteer. Many online communities attempt to block sockpuppets
Like me 😛 Guess who?