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Last Oil Tanker Waiting to Load Kurdish Crude Sails Empty

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June 19, 2023

By Anthony Di Paola (Bloomberg) —

A last tanker that had been waiting in the Mediterranean Sea for nearly three months to load Kurdish crude has sailed away without a cargo amid a payment dispute between Iraq and Turkey.

The departure comes just as officials of the two countries were set to meet Monday to discuss reopening the almost 500,000 barrels-a-day link after it was shut in March. The volume is about half the amount of additional supply cuts being made by Saudi Arabia in July to help revive flagging oil prices.

The key route, operated by Turkey’s state oil firm Botas, carries crude mostly from Iraq’s semi-autonomous Kurdish region to the Turkish port of Ceyhan. The Iraqi central government and the Kurds have clashed for years over rights to revenue from exports through the pipeline.

An arbitration court had earlier this year asked Turkey to pay about $1.5 billion in damages to Iraq for transporting Kurdistan oil without Baghdad’s approval. Ankara wants to negotiate a settlementbefore reopening the pipeline, according to people familiar with the matter, resulting in the route staying shut.

Iraq officials say Turkey has told them it stopped the pipeline because of operational issues after an earthquake in February.

The Nissos Kea, among the world’s largest tankers capable of carrying about 2 million barrels of crude, left the waters of Ceyhan June 9, according to ship tracking data and port agent reports. Satellite signals transmitted by the tanker indicate the vessel was empty as it departed Turkish waters.

The tanker passed through the Suez Canal into the Red Sea and is now moored at the Israeli port of Eilat, according to ship tracking data. The vessel had been signaling Aqaba port in neighboring Jordan but has not sailed there. 

Iraq’s oil exports declined in April and May as the pipeline shutdown deprived the country of its ability to sell to the Mediterranean region.

© 2023 Bloomberg L.P.

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