A mystery oil tanker is anchored in limbo outside of Houston

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This story is based on a radio interview. Listen to the full interview.

Audio Transcript:

Marco Werman: The chaos that is Iraq right now may seem remote to many of you, especially since US troops are no longer stationed in Iraq. But Iraqi politics? They’ve sailed all the way to our doorstep in the form of an oil tanker that’s currently anchored 60 miles off the coast of Texas. It’s been there for 10 days and it’s carrying $1 million barrels of crude oil from the Kurdish region of northern Iraq. The big question is who does the oil really belong to? For the Kurds, it represents the beginning of an oil industry for an independent Kurdistan. For authorities down in Baghdad though, it’s cargo worth $100 million and it should rightfully belong to the Central Iraqi Government, they say. Energy reporter Rhiannon Meyers has been following the story for The Houston Chronicles, she’s in Houston. This tanker is just sitting in the Gulf of Mexico. What’s the deal?

Rhiannon Meyers: Yeah, it’s been sitting out there, like you said, for 10 days now. Really hasn’t moved except to make donuts in the Gulf. Modern shipping tracking software makes it easy for anyone to track ships online and so this tanker was pretty closely watched as it neared the US and Iraq’s lawyers were ready for it when it got here. And so the tanker remain there in the same position now, kind of hanging out there with all of its crew and cargo on board.

Werman: Right, that crude is still on board. What are they waiting for?

Meyers: I think what’s happening here is that you’ve got a legal battle pending in the United States, which makes it really untenable for any US companies to touch that cargo. So, there was a company here locally that was hired to offload that crude. Once they found out there was a dispute about the ownership, they asked the judge to be released from that contract. The judge agreed, so they’re not going to take on that crude and the tanker’s crude buyer still remains a mystery. There were some reports that surfaced last week that a local Houston refinery in the past had purchased Kurdish crude but that refinery has come out and said “We won’t purchase any more in the future,” which really deals a big blow to the Kurdish Regional Government in trying to offload this cargo on someone.

Werman: And the fact that it’s anchored off the coast of Texas and the crude is still on board, that suggests, I assume, that the shippers, the Kurds, thought they had a buyer somewhere in the United States.

Meyers: Everyone I’ve talked to here locally says they definitely had a buyer. The best clue that we have is probably this Houston refinery was interested in buying the crude or may have been the buyer behind the crude but no one is coming out in front of that now. There’s actually another tanker loaded with Kurdish crude that’s headed for New Jersey, but again no one has claimed that they’re the buyer of it.

Werman: This has got to be pretty tricky for the US State Department. They’ve got relations with both the Kurds and the Iraqi governments. Will they eventually have to get in the middle of this and sort it out?

Meyers: They’ve been really hands-off so far. They’ve kind of said “This is something that Iraq and the Kurdish Regional Government really need to work out. This is a private transaction and the dispute ownership really needs to be played out between the two of them.”

Werman: And the Kurds and Baghdad are not really talking very actively right now. Could this tanker just sit there forever?

Meyers: Probably not. There’s some practical matters that are going to get in the way. It’s going to have to refuel at some point, they’re going to need supplies, the crew is going to have to come on shore. So eventually it’s going to have to dock somewhere. What everyone I’ve talked to here has said is that given the legal battle and how unlikely it is that any US companies are going to want to touch this ship, the cargo and the tanker is likely going to have to go to a different port, maybe where the international arm of the law doesn’t reach so far.

Werman: Rhiannon Meyers covers energy for The Houston Chronicle. Thanks very much.

Meyers: Thank you.