Oil tankers tired of waiting on Iraqi Kurdish crude depart empty after a month

Tankers waiting nearly a month to load crude from Iraq’s Kurdish region have departed waters near the pipeline terminal in Turkey, an indication that oil won’t soon flow from the area amid a standoff between the governments involved.

The vessels Neverland and Amax Anthem left the waters near Ceyhan in Turkey over the weekend without loading any crude, according to Bloomberg ship-tracking and port agent reports. Three tankers chartered to take Kurdish crude are still waiting near the port. The five vessels were hired to carry a total of about 4 million barrels of oil.

Iraq’s federal government claims the sole right to sell and be paid for any oil produced in the country and, for more than a decade, has contested the semi-autonomous Kurdish region’s sale of crude produced in its territory. Turkey halted pipeline flows from the northern fields on March 25 after an international arbitration tribunal ruled that it had to pay about $1.5 billion in damages to Iraq for facilitating KRG sales via Ceyhan.

The lack of roughly 450,000 barrels a day of crude sales from Ceyhan has tightened supplies ahead of further cuts announced by producers in the Organization of Petroleum Exporting Countries and partner countries in the OPEC+ grouping. The export halt may be protracted as a restart awaits settlement of the payments dispute between Iraq and Turkey over the sales. 

Iraq, the second-largest producer in OPEC, exports crude from its northern fields via pipeline to the Turkish port of Ceyhan on the Mediterranean. After jumping about $10 since the export halt and the OPEC+ announcements Brent crude is trading at about $80 a barrel.