KURDISTAN OIL: NO VIOLATIONS
A Texas court Monday threw out an order to seize one million barrels of oil from Iraqi Kurdistan, potentially opening the way for its delivery to the U.S.
The Texas court's decision determines the fate of a $100-million cargo of crude oil which has been stranded in the Gulf of Mexico since late July, the victim of a long-standing dispute between Baghdad and the Kurdistan Regional Government over oil sales.
The one-million-barrel United Kalavrvta tanker, currently parked near the port of Galveston in Texas, is one of a number of sizable oil shipments exported from Iraqi Kurdistan through a new pipeline to Turkey in defiance of Baghdad, which claims sole jurisdiction over Iraq's natural resources and views the KRG's bid for economic autonomy as a threat to its authority.
The federal government has acted aggressively to block Kurdish oil sales, threatening to blacklist and take legal action against anyone involved in its sale.
When it became apparent the United Kalvrvta intended to deliver its cargo to Texas in late June, Baghdad secured a court order in Texas to seize the oil if it came ashore.
However, in a ruling Monday, U.S. District Judge Gray Miller granted a motion from the Kurdistan Regional Government to vacate the order.
"Kurdistan's unauthorized export of oil over land—and later overseas—may violate Iraqi law, but it doesn't violate U.S. maritime law," the Judge said in his ruling.
The judge gave Baghdad 10 days to amend its complaint, leaving the federal government with an avenue to potentially keep pressing its case.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.