U.S. Judge Sides With Iraq, Blocks Kurds' Attempt To Sell Oil

A U.S. judge has blocked an effort by Iraq's Kurdistan region to sell $100 million worth of crude oil to refiners in the U.S. It's sitting in a giant tanker ship off the coast of Texas. The judge agreed with the Iraqi government that the oil belongs to it and not the Kurds.

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LINDA WERTHEIMER, HOST:

As Iraq has been torn apart by sectarian violence, the country's Kurdish population has moved towards independence with income from oil.

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Iraq's Kurds live in an autonomous region in the north of the country. Earlier this month Kurdish forces seized two large oil fields as fighting escalated near a disputed city. They've been trying to sell oil independently from Iraq's government, which says that violates the country's constitution.

WERTHEIMER: A U.S. judge has now sided with the Iraqi government in a dispute over the attempted sale of oil by the Kurdistan Regional Government through a Texas port. Here's NPR's John Ydstie.

JOHN YDSTIE, BYLINE: The Iraqi Government went to U.S. court to claim the oil that's now in a tanker near Galveston, Texas. The tanker's carrying a million barrels of crude intended for the U.S. market. The Kurdistan Government claims the right to sell the oil because it's from fields in its region says Bhushan Bahree, the senior director of global oil at IHS at oil.

BHUSHAN BAHREE: What is happening in Galveston symbolizes what is unfolding in Iraq and that is whether it is going to remain a military state or whether Kurdistan will go its own way.

YDSTIE: The United States opposes the Kurdistan Government's effort to sell oil, believing it could lead to a breakup of Iraq. The State Department has said the oil belongs to all Iraqis. U.S. marshals have been ordered to seize the crude if it's brought ashore but State Department spokesperson Jen Psaki said yesterday the ship remains outside U.S. jurisdiction.

JEN PSAKI: Our understanding is that if the oil enters into U.S. jurisdiction the court order against the cargo can be enforced. But at this point in time it remains - the cargo remains on the ship which is outside of jurisdiction.

YDSTIE: Kurdistan has had some success in selling crude including to Israeli buyers. But Bhushan Bahree says since the Baghdad government is the recognized government of Iraq it will be hard for the Kurds to sell the oil in most countries. John Ydstie, NPR News, Washington.

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