Iraq Loses Bid to Seize Kurdish Oil Near Texas

HOUSTON (CN) - Refusing to let Iraq seize 1 million barrels of oil aboard a tanker in the Gulf of Mexico, a federal judge found he lacks jurisdiction to resolve the dispute with Kurdistan.

The Iraqi government sued the Kurdistan Regional Government of Iraq in July, claiming that 1,032,212 barrels of oil the Kurds had loaded on a ship in Turkey and shipped to the Gulf of Mexico belongs to the people of Iraq.

Though U.S. Magistrate Judge Nancy Johnson initially granted Iraq an arrest warrant for the crude, she conceded the next day that U.S. marshals could not seize the crude so long as the tanker remained more than 60 miles off the coast of Galveston, outside U.S. waters.

Kurdistan moved to vacate Johnson's seizure order, arguing that U.S. maritime law does not apply to the dispute.

Iraq countered that Kurdistan committed an actionable maritime tort when Turkish pipeline operators loaded the oil onto a tanker in the Mediterranean Sea.

U.S. District Judge Gray Miller ruled for Kurdistan on Monday, finding that U.S. maritime law does not apply because the alleged theft of the oil happened far from sea.

"Indeed, the alleged tort accrued either upon extraction of the minerals or their export to Turkey, seven months or more before the cargo was loaded onto the vessel," the 13-page order states.

Finding that the dispute should be hashed out in Iraq, Miller concluded: "Kurdistan's unauthorized export of oil over land - and later overseas - may violate Iraqi law, but it does not violate U.S. maritime law."

The judge did, however, suggest that Iraq may have a claim against Kurdistan under the Foreign Sovereign Immunities Act.

In its motion to vacate, Kurdistan said it expects the crude oil will "enter the territorial jurisdiction of the Southern District of Texas in the near future."

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