First oil delivery from disputed Kurdish pipeline set for Israel Reuters
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Reuters
The SCF Altai tanker docks near Israel's Ashkelon Port, June 20, 2014. Photo by Reuters

Kurdish oil has been sailing for weeks across the Mediterranean, looking for a buyer. Finally. a country that will take it in has been found, according to a Reuters report out of London.

The Liberia-registered tanker Altai docked in Ashkelon on Friday, carrying a million barrels of oil produced in the Kurdish regions of Iraq. For many months now, the Kurds have been extracting oil from wells under their control in northwestern Iraq. The oil is piped to the port of Jihan in southern Turkey. However, the Iraqi government claims that this oil belongs to Iraq and can only be sold through Iraq’s Petroleum Ministry.

For years, the Kurds have been trying to reach an agreement with the central government in Baghdad regarding quotas and sharing of revenues. They consider the oilfields located in the Kurdish region as belonging to them and that, in the absence of an agreement, they are permitted to sell oil to any buyer. In May, the Kurds took a further step by leasing two tankers, loading them in Jihan and looking for buyers. Attempts to sell oil to Morocco and other countries were rebuffed, out of solidarity with Iraq and concerns over legal action. It now seems that the Kurds have re-discovered their old ally Israel, which agreed to purchase the oil. To avoid a direct sale, the Kurdish tanker unloaded its oil onto another tanker. It’s unclear if the purchase is a one-off deal or the start of a permanent arrangement.

Kurdish authorities said that they had no problems with selling to Israel. A government source said that “we are satisfied to have customers, as another facet of our independence. Any customer will benefit from steady supplies at good prices.” He declined to state the price or whether other orders have been placed.

The oil dispute is one of the main factors underlying Kurdish opposition to Iraqi Prime Minister al-Maliki, who accuses them of collaborating with radical Islamists and Sunni tribesmen. Last week the Kurds took over Kirkuk. They joined their pipeline to a major one leading to Turkey, thus expanding their export potential.

Kurdish oilfields currently produce 120,000 barrels a day and the hope is to quadruple that. Washington opposes this export in principle since it detracts from Iraq’s unity. But given al-Maliki’s recent conduct, it is unlikely that the United States will object to selling oil to Israel. However, Iran may yet put pressure on the Kurds to desist from such transactions.

Apparently, this oil will be stored in Israel rather than going to local facilities.