U.S. Coast Guard Houston Office

Sixty miles off the coast of Galveston, Texas, an oil tanker holding 1 million barrels of Kurdish oil has sat in limbo for the past two weeks, unable to arrive in the U.S. because of a lawsuit by the Iraqi Oil Ministry.

The Iraqi government claims that Kurdistan, an autonomous region of that country, has no right to directly export its own oil. On July 28, a Houston judge ordered U.S. Marshals to seize all $100 million worth of oil if the tanker entered U.S. waters.

The tanker has been floating in international waters ever since.

Photo courtesy of U.S. Coast Guard Houston office

The situation poses a diplomatic conundrum for the United States. If Kurdistan's regional government sells its oil they will raise money for their fight against the Islamic State in Iraq and Syria (ISIS). On the other hand, if the sale of oil could strengthen the position of Kurdish separatists by making their region more financially independent from Iraq's central government, which goes against the U.S.' goal of a unified Iraq.

Advertisement

“We don’t understand why the State Department has on one hand said we need your help to save Iraq [from ISIS], but we are not giving you any economic tools and you have to do what [Iraq Prime Minister Nouri al-] Maliki tells you to regarding oil,” Michael Howard, an adviser to the Kurdish minister of natural resources, said in a recent interview with the Washington Post.

There's also a question about who would buy the oil shipment. U.S. companies are loath to bid on an oil shipment that's potentially subject to litigation. State Department deputy spokeswoman Marie Harf has warned U.S. oil companies that buying Kurdish oil could result in legal action by the Iraqi Oil Ministry.

Further complicating the situation is the fact that the Iraqi government has cut the Kurds out of the federal budget as punishment for the region's attempts to export oil through a pipeline to Turkey. The U.S. has also tried to block those efforts by pressuring its allies in the region.

Advertisement

But the longer the situation drags on, the more difficult it becomes for the United States to have it both ways. The growing threat of ISIS has put the U.S. in a position where it needs to decide whether to join the fight themselves— CNN reports that the Pentagon is considering air strikes against ISIS in Kurdish areas—or help the Kurds raise the funds they need to defend themselves.

The U.S.' hope for a unified Iraq appear increasingly fleeting. The Kurdish region has become isolated from the rest of Iraq by a belt of ISIS-controlled territories.

For now, the Kurds' best hope for continued resistance could be sloshing around in a tanker hold off the coast of Texas. Meanwhile, Bloomberg reports that another Kurdish oil tanker is scheduled to arrive in New Jersey next week.

Daniel Rivero is a producer/reporter for Fusion who focuses on police and justice issues. He also skateboards, does a bunch of arts related things on his off time, and likes Cuban coffee.