Submitted by Tyler Durden on 11/29/2015 09:32 -0500
“Effectively, we have been financially discriminated against for a long time. By early 2014, when we did not receive the budget, we decided we need to start thinking about independent oil sales” — Ashti Hawrami, Kurdistan’s minister for natural resources
In June of 2014, the SCF Altai (an oil tanker) arrived at Ashkelon port. Hours later, the first shipment of Kurdish pipeline oil was being unloaded in Israel. “Securing the first sale of oil from its independent pipeline is crucial for the Kurdish Regional Government (KRG) as it seeks greater financial independence from war-torn Iraq,” Reuters noted at the time, adding that “the new export route to the Turkish port of Ceyhan, designed to bypass Baghdad’s federal pipeline system, has created a bitter dispute over oil sale rights between the central government and the Kurds.”
A week earlier, the SCF Altai received the Kurdish oil in a ship-to-ship transfer from the The United Emblem off the coast of Malta. The United Emblem loaded the crude at Ceyhan where a pipeline connects the Turkish port to Kurdistan.
The Kurds’ move to sell crude independent of Baghdad stems from a long-running budget dispute. Without delving too far into the details, Erbil is entitled to 17% of Iraqi oil revenue and in return, the KRG is supposed to transfer some 550,000 bpd to SOMO (Iraq’s state-run oil company). Almost immediately after the deal was struck late last year, Baghdad claimed the Kurds weren’t keeping up their end of the bargain and so, only a fraction of the allocated budget was sent to Erbil during the first five months of the year.
This was simply a continuation of a protracted disagreement between Erbil and Baghdad over how much of the state’s crude revenue should flow to the KRG. For its part, Iraq has threatened to sue anyone that buys independently produced Kurdish oil. For instance, when The United Kalavrvta – which left Ceyhan last June – prepared to dock in Galveston, Texas a month later, a SOMO official told Reuters that Iraq’s foreign legal team was “watching closely the movement of the vessel and [was] ready to target any potential buyer regardless of their nationality.”
You get the idea. Erbil wants a bigger piece of the pie, Baghdad doesn’t want to give it to them, and so some time ago, the KRG decided to simply cut the Iraqi government out and export crude on its own. The dispute is ongoing.
(at an Erbil oil refinery, the Kurds stand guard)
Ok, so why are we telling you this? Recall that over the past several weeks, we’ve spent quite a bit of time documenting Islamic State’s lucrative black market oil trade. Earlier this month, Vladimir Putin detailed the scope of the operation in meetings with his G20 colleagues. “I’ve shown photos taken from space and from aircraft which clearly demonstrate the scale of the illegal trade in oil and petroleum products,” he told journalists on the sidelines of the G20 summit in Antalya. The very same day, the US destroyed some 116 ISIS oil trucks, an effort that was widely publicized in the Western media. In the two weeks since, Moscow and Washington have vaporized a combined 1,300 ISIS oil transport vehicles.
No one knows why it took the US 14 months to strike the convoys. The official line is that The Pentagon was concerned about “collateral damage”, but we doubt that’s the reason (for a detailed discussion of this, see here). Well now that the mainstream media have been forced to take a closer look at Islamic State’s main source of revenue (the group makes nearly a half billion a year in the illicit oil trade), we decided to take a closer look at exactly who is facilitating the transport of the stolen crude and where it ultimately ends up because you can be sure that the story you get from the major wires will be colored by a slavish tendency to avoid any and all “inconvenient” revelations. This is the fourth in a series of articles on the subject and we encourage you to review the first three:
- The Most Important Question About ISIS That Nobody Is Asking
- Meet The Man Who Funds ISIS: Bilal Erdogan, The Son Of Turkey’s President
- How Turkey Exports ISIS Oil To The World: The Scientific Evidence
On Friday we highlighted an academic study by George Kiourktsoglou and Dr Alec D Coutroubis who took a look at tanker rates at Ceyhan around siginifant oil-related events involving ISIS. Here’s what the researchers found:
In their words, “it seems that whenever the Islamic State is fighting in the vicinity of an area hosting oil assets, the 13 exports from Ceyhan promptly spike. This may be attributed to an extra boost given to crude oil smuggling with the aim of immediately generating additional funds, badly needed for the supply of ammunition and military equipment.”
Now you can begin to see the connection. Ceyhan is the port from which Kurdish oil (technically “illegal” to let Baghdad tell it) is transported, and as Kiourktsoglou and Coutroubis note, “the quantities of crude oil that are being exported to the terminal in Ceyhan exceed the mark of one million barrels per day and given that ISIS has never been able to trade daily more than 45,000 barrels of oil, it becomes evident that the detection of similar quantities of smuggled crude cannot take place through stock-accounting methods.” In other words, if ISIS oil was being shipped from Ceyhan, it would essentially be invisible.
Here’s where things get interesting. A few weeks ago, Reuters released an exclusive report detailing how Erbil hides its crude shipments from Baghdad. Here are some of the details:
Most customers were scared of touching it with Baghdad threatening to sue any buyer. Large oil companies – including Exxon Mobil and BP – have billions of dollars worth of joint projects with Baghdad.
Some buyers took tankers to Ashkelon, Israel, where it was loaded into storage facilities to be resold later to buyers in Europe. Kurdish oil was also sold offshore Malta via ship-to-ship transfers helping disguise the final buyers and thus protect them from threats from Iraqi state firm SOMO.
It was a high stakes game. A ship would dock off Malta waiting for another to arrive to take a cargo to a final destination. Sometimes two ships would be sent – one sailing off empty and another full – to complicate cargo tracking.
“Everyone suddenly became a ship tracking expert. So we had to raise our game too … But one thing was proven correct – when oil is out, it flows,” said Hawrami.
Ok, so a scheme involving ship-to-ship transfers off the coast of Malta was used to get Kurdish crude to places like Israel. “Israeli refineries and oil companies imported more than 19m barrels of Kurdish oil between the beginning of May and August 11, according to shipping data, trading sources and satellite tanker tracking,” FT reported last week. “That is the equivalent of about 77 per cent of average Israeli demand, which runs at roughly 240,000 barrels per day. More than a third of all of the northern Iraqi exports, which are shipped from Turkey’s Mediterranean port of Ceyhan, went to Israel over the period.”
At this juncture, we begin to get an idea of what’s going on here. Kurdish oil is already technically illegal and Turkey is happy to facilitate its trip to foreign buyers via Ceyhan. What better way for ISIS to get its own oil to market than by moving it through a port that already deals in suspect crude? Al-Araby al-Jadeed (a London-based media outlet owned by the Qatari Fadaat Media) claims to have obtained a wealth of information about the route to Ceyhan from an unnamed colonel in the Iraqi Intelligence Services. Here’s their account:
The information was verified by Kurdish security officials, employees at the Ibrahim Khalil border crossing between Turkey and Iraqi Kurdistan, and an official at one of three oil companies that deal in IS-smuggled oil.
The Iraqi colonel, who along with US investigators is working on a way to stop terrorist finance streams, told al-Araby about the stages that the smuggled oil goes through from the points of extraction in Iraqi oil fields to its destination – notably including the port of Ashdod, Israel.
“After the oil is extracted and loaded, the oil tankers leave Nineveh province and head north to the city of Zakho, 88km north of Mosul,” the colonel said. Zakho is a Kurdish city in Iraqi Kurdistan, right on the border with Turkey.
“After IS oil lorries arrive in Zakho – normally 70 to 100 of them at a time – they are met by oil smuggling mafias, a mix of Syrian and Iraqi Kurds, in addition to some Turks and Iranians,” the colonel continued.
MUCH MORE @ http://www.zerohedge.com/news/2015-11-28/isis-oil-trade-full-frontal-raqqas-rockefellers-bilal-erdogan-krg-crude-and-israel-c
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