Iraq vows to fight on

Iraq’s Ministry of Oil has pledged to continue to pursue seizure of a crude cargo alleged to have been illegally exported by the Kurdistan Regional Government despite a recent US court order throwing out a prior arrest order.

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As TradeWinds reports in its weekly edition today, US District Judge Gray Miller ruled that the US federal court in Galveston cannot seize the cargo on the Callimanopulos group’s 159,000-dwt United Kalavrvta (built 2005) because the actions at the heart of the dispute took place on land, meaning the federal court does not have maritime jurisdiction in the case.

But the judge left room for the ministry to amend its lawsuit.

“The ministry of oil is emphasising that it is preparing the amended request and will forward it in the required period,” the ministry said in a statement quoted in Reuters.

“The decision of the court is only to lift the seizure of the shipment while at sea. … This doesn't exempt [the oil] from any seizure decision when it arrives on American soil.”

The dispute over the oil cargo has kept the suezmax United Kalavrvta in limbo off the Texas coast for weeks, even though US marshals were unable to serve the prior seizure order because the vessel remained outside of US territorial waters. Vessel tracking services show the ship remained at an anchorage as of Tuesday, although its position has not been updated since then.

Conversion: on land or at sea?

Iraq alleges that the Kurdish government committed an act of conversion when it exported the crude without the central government’s authorisation.

But US federal courts can only seize ships or their cargo when the underlying claim is maritime in nature.

Iraq argued that the conversion took place when the oil was transferred from a Turkish pipeline at Ceyhan to the United Kalavrvta.

The judge disagreed, saying the claim for oil conversion is rooted in the moment when the commodity is extracted contrary to its owner’s rights.

“Iraq has pled facts showing that its claim for conversion accrued on land,” Miller wrote.

The United Kalavrvta is one of several Callimanopulos group tankers that have carried disputed oil cargoes from the port.