Baghdad Scores a Goal in its Oil Dispute with Kurdistan

Apr 2, 2015 | David Romano
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Last September, the federal government in Baghdad filed a $300 million lawsuit against the Kurdistan Regional Government’s (KRG) most important oil tanker shipping partner, Greece’s Marine Management Services (MMS). MMS’ oil tankers may be familiar to readers who followed the news about the KRG’s efforts to pursue independent Kurdish exports: the United Carrier, the United Emblem, the United Dynamic the United Leadership and the United Kalavryta (which is the tanker that spent months off the coast of Texas last year, until finally unloading its oil in Israel instead). The lawsuit claimed that MMS was illegally participating in the sale of Iraqi oil when it shipped the KRG’s exports to market without Baghdad’s consent.

With the price of oil so low and the war against the Islamic State still raging, neither Iraq nor Kurdistan can afford these sorts of shenanigans. The simple compromise would be for Baghdad to accept the KRG’s right to sign its own contracts with oil companies and manage its own oil resources, while the KRG agrees to let SOMO market its oil along with that of the rest of Iraq. SOMO would collect revenue with an automatic gross 17% going straight into a KRG-controlled bank account, from which the KRG could pay its oil companies.