Oil Tanker Full Of Kurdish Oil Wanders Mediterranean Seeking Buyer At 50% Discount

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A tanker full of Kurdish oil,  recently transmitted through a newly opened pipeline to Turkey, has been wandering around the Mediterranean this week, looking for a buyer at a 50% discount.

The tanker may now even be moored off the coast of Israel, possibly seeking a buyer in that country. Meanwhile the Iraqi government has threatened to sue anybody who buys it, claiming a monopoly on the right to export oil from the country.

The Kurds have for quite a while been busy getting ready to set themselves up as the independent state of Kurdistan, with the looming de-facto dismemberment, for all practical purposes, of Iraq as a functioning modern state, hitherto nominally a federation but currently made up of warring Shiite, Sunni and Kurdish regions,

As Sunni insurgents earlier seized Mosul this week, Kurds remain in firm control of the region’s biggest city, and its primary oil hub, Kirkuk. With its well armed, and well trained, Kurdish “peshmerga” militia units the Kurds appear to fulfill the primary characteristic of statehood in their enclave, i.e. holding a monopoly on the use of force in their territory. It is not often mentioned perhaps, but the great twelfth century warrior Saladin was also of Kurdish origin.

When the new oil pipeline to Turkey opened in January, to the port of Ceyhan, the Kurds also obtained a direct outlet for their oil that in principle frees them from the revenue controls of the central government, who have been reluctant, in many people’s view, to share oil revenues across the country equitably.

Such regional oil revenue sharing disputes have been at the heart of the Shiite government of Nouri al-Maliki’s problems in maintaining consensus about the future governing of Iraq and continued consent of the governed.

As Prime Minister Maliki’s authority has now collapsed in the face of the Sunni insurgency by the Islamic State of Syria and the Levant, and of his armed forces’ lack of willingness to fight, the Kurds clearly sense their opportunity.

Turkey has now turned out to be a somewhat unlikely ally for the Kurds, as well. For a long time Turkey was not sympathetic to Kurdish aspirations in Iraq, fearing independence-leaning contagion amongst the substantial Kurdish populations inside their own border regions directly adjacent to Iraq. There are also substantial Kurdish minorities inside Iran’s borders as well. A unified state of all three of these minority groupings, which would be capable of forming a contiguous geographic political entity, has been a long time dream of Kurdish politicians.

However in the last year or so, as Shiites have come to the ascendancy in the neighbourhood, under the willful sponsorship of Iran, the Turks and the Kurds have come to something of a rapprochement, using the principle that the enemy of my enemy is my friend. In the first oil shipments that were sent down the new pipeline to Turkey, for example, Turkey agreed to store the, already to date substantial, Kurds’ oil shipments through the pipeline in separate storage areas away from other shipments, and to permit them to be loaded on tankers separately.

Yesterday Bloomberg even quoted Turkish Energy Minister Taner Yildiz as saying he was inclined to let the Kurds ship and sell their oil, calling such sales “entirely legitimate.”

This first tanker full of Kurdish oil has since been wandering around the Mediterranean looking for a home. The Kurds are apparently offering to sell its contents now at a massive 50% discount to whomsoever will deal with them independently of the Government of Iraq. The Maliki government, however, still claims the oil as its own and threatens to sue anybody who deals with such an unauthorized entity directly on their own.

After ambling as far as Morocco we now hear that the tanker is moored somewhere off the Israeli coast, and one might infer the Israelis may be tempted to pick up such a bargain. If they do they may engage the temporary wrath of the United States which, so far, seems to be acting, albeit very reluctantly, to try and prop up the Maliki regime, at least until a better alternative turns up.

Kirkuk real estate has been booming in the last couple of years or so too, as the new proto-state continues to gain confidence. With the support of both Turkey and Israel it may begin to exhibit so many of the features of a state, not least including the substantial approval of its own citizens, that formal statehood may well be the next step to emerge, with selective recognition by a number of countries to follow.

Independent oil exploratory companies have been showing up there in droves, too, including Turkish company Genel Energy, in which London financier Nathaniel Rothschild is heavily invested.

As the demise of the British Empire showed, taking nearby Cyprus as one similar case study, enforced political federations of otherwise completely incompatible people rarely work. The arbitrary lines on a map drawn byWinston Churchill and his military allies, after World War One was over, never really succeeded in translating into stable political geographies in Arabia, and now some of these lines may very well be re-drawn, with the Kurds at the front of the queue.