Friday May 16, 2014

I've Been Thinking:

Israel and the United States are importing crude oil from Iraqi Kurdistan. This might just turn into a huge diplomatic time bomb.

According to Iraqi law, all oil must be sold through Bagdad. But more and more clients are going to the Kurds and getting oil from them. The oil is piped across the border to the Turkish port of Dortyol and uploaded onto tankers that then make their way to their destinations.

According to ship tracking companies who track the whereabouts of tankers, the first ship left for the United States two weeks ago.
Since January four ships filled with Kurdish oil have gone from Turkey to Israel. Add on another two ships that arrived in Israel
last summer.

The Iraqis are livid and are threatening all kinds of reprisal, including law suits.

But the United States has, finally, figured out that those in control of oil in Iraq are not their friends. The Russians and the Iraqis are ultimately in control of the oil production.

And it became clear to the US, like it became clear to Israel and several other countries, that good prices and reliable timetables for delivery were something they could count on from the Independent Kurdish Region in Iraq.

When it comes to energy, reliability trumps everything but price.

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