Kurdish Oil Mystery Deepens as Ship Unloads Cargo in South China Sea

A worker walks on top of an oil tanker at Turkey's Mediterranean port of Ceyhan(Reuters)

A tanker carrying Kurdish oil has unloaded part of its cargo in the South China Sea, although the identity of the buyer remains a mystery.

The United Emblem Tanker had left the Turkish port of Ceyhan in June, carrying up to 1 million barrels of crude oil produced in Iraqi Kurdistan and exported by the autonomous region's government without permission from Baghdad.

It is one of three tankers that were loaded and sailed from Ceyhan in June.

A second tanker, the United Kalavrvta, has been anchored off the Texas coast for days amid a protracted legal dispute between Iraq and Kurdistan over the autonomous region's right to sell oil on international markets.

A US judge rejected a request from Baghdad that the US seize the tanker, saying that it was anchored outside of American territorial waters and did not fall under US jurisdiction.

The Kurdistan Regional Government filed a letter with the Texas court, stating that its sales of oil are in line with the Iraqi constitution.

Baghdad has launched a lawsuit against Turkey, accusing Ankara of assisting the Kurds to smuggle oil out of Iraq. It has threatened to pursue legal action against governments if they assist the Kurds with selling the oil.

A senior source at Marine Management Services said the ship-to-ship transfer involving the South China Sea cargo was sound, according to Reuters news agency.

The United Emblem tanker is "fixed to a legitimate charterer and performing legitimate operations", said Kostas Georgopoulos, as quoted by Reuters. He added that "the ship is still in international waters".

Reuters reported that the ship could have offloaded around half of its cargo onto another ship. The ships' destination remain unknown, as does the identity of the buyer.