Massenbach-Letter: NEWS 07/11/14

Massenbach-Letter. News

*Herausgegeben von Udo von Massenbach, Bärbel Freudenberg-Pilster, Joerg Barandat*

· EIA study removes final barrier to U.S. oil exports: John Kemp

· Hungary deal boosts outlook for direct Kurdish oil sales

· The Missing Women of Afghanistan – After 13 Years of War, the Rule of Men, Not Law

· Turkey leaders can turn Kobane developments to their advantage

· ISIS in Central Asia

· Der Koran hat zwei Gesichter

· Eastern Saudi Arabia, the two most important maps in the oil world

Massenbach* Turkey leaders can turn Kobane developments to their advantage*

In a matter of 48 hours Turkey went from calling the Democratic Union Party (PYD), the Kurds defending the Syrian border town of Kobane, a terrorist group, to opening up an arms corridor from Iraq to aid its fight against the Islamic State.

That dramatic change in policy, along with growing collaboration between the United States and the PYD, could tip a weeks-long battle against Islamic State (ISIS) militants in favor of the Kurds. It could also finally pave the way for a resolution between Turkey and the Kurdistan Workers’ Party (PKK), which has waged a three-decade insurgency against the Turkish state. This would remove a major irritant in the coalition’s strategy in Syria.

Turkish leaders in Ankara resisted domestic and international pressure to aid the PYD for more than a month while Kobane became the focal point of the operation against ISIS. Turkey’s Kurds took to the streets to demonstrate against what they saw as the government’s refusal to protect their kin next door. In reaction to Turkish President Recep Tayyip Erdogan’s indifference to the prospect of the massacre of Kurds at the hands of the Islamic State, the PKK’s imprisoned leader, Abdullah Ocalan, said that if the town fell he would end the peace negotiations with Ankara that have been in progress since 2012.

With help arriving from the Iraqi Kurdish Peshmerga and the United States, the prospect of losing Kobane is no longer imminent. The Turkish government can breathe a sigh of relief, but not for long. Washington’s decision to help the PYD militarily marks the emergence of a new alliance at a time when Turkey has already been unnerved by the recent diplomatic boost the group has received in the West.

In response to the growing Islamic State threat, the PKK, the Peshmerga, and the PYD have established a united Kurdish front, with the PYD militants coming to the aid of Peshmerga fighters and halting the jihadi group’s advance into the autonomous region of northern Iraq. The PYD forces helped thousands of Yezidis escape from the western part of the region as ISIS attacked, making the group the West’s best hope for on-the-ground troops and winning it positive reviews in Western media. Since the PKK started its assault against the Islamic State in northern Iraq, there has been a lot of talk in Western capitals about removing it from the terror list. The US move to openly ally with the PYD only adds to Turkey’s fears.

But if Turkey’s leaders manage to look beyond their long-running Kurdish phobia, they could turn the PYD-US dialogue to their advantage. The PKK, with its new international legitimacy and the alliance the United States forged with its Syrian offshoot, is unlikely to put these gains at risk by resuming violence against Turkey.

For Turkey, the Kurdish issue is more than a domestic security problem. Its concern over Kurdish autonomy in northern Syria has diminished its room for maneuver and has kept it from playing an effective role both in the anti-Assad and the anti-Islamic State coalition. Turkey has already been marginalized in regional affairs due to other foreign policy miscalculations, and it cannot to miss a seat at the table on Syria because of its reservations toward the PYD.

Turkey shares a long border with Syria, hosts 1.6 million Syrian refugees, and has historical ties to Syria’s ethnic and sectarian communities. Home to well-established Salafi networks, Turkey is one of the countries most vulnerable to attacks by the Islamic State. It is thus in Ankara’s interest to treat the peace process with the PKK more urgently so that it can attend to these pressing matters.

Nevertheless, Turkey’s policies still prioritize undercutting the Kurds over any other concern. Its policies are largely to blame for the Syrian Kurds’ failure to join the Western-backed Syrian opposition, and it has been dragging its feet to join the US-led coalition against the Islamic State because it views ISIS as an effective fighting force not just against the Assad regime, but also against the PYD.

A US-PYD-Turkish partnership, however, could work toward the removal of the Assad regime, which Ankara says is its top priority in Syria. Turkey has criticized the US-led coalition for prioritizing the removal of ISIS without addressing the root cause of the problem: the regime in Damascus. The United States, however, could engage the PYD in pursuing both objectives.

With the right push from Washington and Ankara, the Syrian Kurds, with their secular bent and effective fighting force, could become part of the ground force that the West so desperately needs in Syria. The United States has taken a positive step in reconsidering its approach vis-à-vis the PYD. At a time when the lingering Kurdish issue has caused Turkey to become marginalized in the fight against ISIS, both the PKK and Ankara would be well served if they took steps to advance the stalled peace process.

Let’s hope the US and Turkish decisions to help the PYD are more than tactical moves.

Gonul Tol is Executive Director of the Center for Turkish Studies at the Middle East Institute


Oil Prices Continue to Define Geopolitics*

Editor’s Note: Oil prices dropped steeply Oct. 14, with crude oil futures falling 4.6 percent to $81.84 per barrel — the biggest decrease in more than two years. Brent crude dropped by more than $4 a barrel at one stage in the day, dipping below $85 for the first time since 2010. While these are relatively substantial drops, they are just one part of a continuing trend Stratfor has been tracking over the past few months. Factors behind the slump include weak demand, a surfeit of supply and the fact that many large Middle Eastern producers are reluctant to reduce their output.

In light of today’s developments, we are republishing the following diary from Oct. 2, which details the reasons behind the falling prices and how the drops could affect oil-dependent countries around the world.

The global oil benchmark, Brent crude, fell Thursday to about $92 per barrel before rebounding to finish the day at around $94 per barrel, the lowest price since mid-2012. The latest sell-off follows one of the sharpest declines in a quarter in recent years, in which the price of oil slid about 16 percent. It may be premature to forecast sustained international oil prices lower than $90 per barrel, but if the price of oil remains close to where it is now, many oil exporting countries will feel the pain after basing their budgets on previous price expectations.

Simply put, the oil market has gotten overstocked. After spending much of the year producing only around 200,000 barrels per day, Libya has seen its production jump up by about 700,000 bpd since mid-June. The United States has continued its relentless expansion of oil production, with the latest Energy Information Agency figures estimating that U.S. production has increased by about 300,000 bpd since the beginning of August, and Iraq has experienced similar gains. Russia, Angola and Nigeria have also seen marked boosts in production. While most of the recent production increases are one-offs, North America could add another 1 million to 1.5 million barrels of production by the end of next year.

Despite these noteworthy hikes in oil production, sluggish demand by European and Asian (particularly Chinese) consumers has proved just as important to oil prices. While China’s demand will continue to grow, demand in developed countries will remain flat, as it has for a while. These factors only add to the concern that if left unchecked, oil prices per barrel in the $90-$100 range may persist for the foreseeable future.

Lower global oil prices will create challenges for several OPEC producers and others, particularly Russia. While some have suggested that OPEC will lower its production targets, it may not have the ability or the unity to coordinate a large enough drop in production to counter trends elsewhere and bring prices to a level more desirable to it (above $100 per barrel). If oil prices do return to this level in the near future, it likely will have little to do with OPEC’s actions.

The Standoff Between Russia and the West

The first and most import consequence of lower oil prices is the effect it will have on the ongoing struggle between Russia and the West. Energy commodities dominate the Russian economy, particularly its exports. Any sustained drop in oil prices would directly impact the country’s export revenues, and Russia’s GDP would take a significant hit. The Kremlin’s 2014 budget was based on oil prices averaging $117 per barrel for most of the year, with the exception of prices of $90 per barrel for the fourth quarter. For 2015, however, the budget has been pegged at $100 per barrel after much debate within the Russian leadership. While Moscow has significant financial reserves and can run a budget deficit if need be, Finance Ministry officials have estimated that lower oil prices could shave off 2 percent of Russia’s GDP.

Although Russia has been able to weather the effects of U.S. and EU sanctions thus far for its action in Ukraine, the restrictions have already led some firms, such as Rosneft, to ask for financial assistance from the country’s National Wealth Fund. A reduction in oil prices, and in turn lower revenues for Russia’s budget, will constrain the Kremlin’s ability to support Russian businesses hurt by sanctions the longer they are in place. With less of a financial cushion to soften to consequences of sanctions in the longer term, the Kremlin will have to moderate its position in the ongoing negotiations over the future of Ukraine to meet the demands of Western partners and achieve a reduction in sanctions.

Competition in the Middle East

As the West looks to gain from low oil prices in its struggle with Russia, it is also looking for an opportunity to negotiate with a beleaguered Tehran to come to some sort of a resolution on the Iranian nuclear program. For Europe, Iran and its large natural gas reserves represent one of the most promising long-term sustainable alternatives to Russian natural gas. Tehran is facing sanctioned export volumes, lower profit margins and ongoing expenses because of proxy conflicts in Syria and Iraq, and it can ill afford a sustained downturn in global oil prices. Progress on coming to an agreement with the West may be slow, which will only place more pressure on Tehran to negotiate.

Saudi Arabia is also set on maintaining its global market share and has an opportunity in the short term to rely on its considerable foreign exchange reserves and low production costs to wait out other global producers. Riyadh’s oil output is its most strategic resource, and one that the government is quick to use to its advantage. With summer temperatures beginning to cool and regional consumption starting to taper off, Riyadh can free up larger volumes to export, even at lower prices. The Saudis are also looking to leverage their short-term economic stability over rivals such as Russia, especially as they square off with Iran over the future of the Syrian government.

Saudi Arabia also has the ability to take a considerable number of barrels of oil offline if it wants to. Recently, however, it has offered discounts on its crude oil to secure market share for November, perhaps signaling to other OPEC members that while Riyadh may be willing to take its supply offline, others will have to do the same. But there is no incentive for other countries to reduce their output, since most Gulf producers will still manage to make a profit in the $90-$100 per barrel range; lowering production levels, therefore, would only reduce revenues.

The Americas and Beyond

Outside the Middle East, a decline in oil prices will also affect Venezuela. Officially, Caracas sets its budget at the low target of $60 per barrel of oil, a precedent begun by former President Hugo Chavez. Excess revenue could then be funneled elsewhere to off-budget expenditures to satisfy political patrons. Venezuela is in a dire financial position, needing oil prices perhaps as high as $110 to meet expenditures both on and off the book. Sustained low oil prices would severely hamper Caracas‘ ability to finance its imports, perhaps forcing government officials to get serious on selling foreign assets, such as Citgo, and gold from its central bank reserves, or offering even more attractive terms on loans for oil deals with the Chinese, though Beijing has recently balked at this. If oil prices stay low for an extended period, Caracas could also be forced to reconsider its deals with Cuba or programs like Petrocaribe.

Meanwhile, for developed massive oil importers — Japan, China, India and the European Union — low oil prices will give some respite to significant import bills. On the other hand, prices could also increase short-term strain in Europe, where energy has been the main factor pushing monthly inflation lower. While lower energy costs are good for Europe in the long run, they also raise the threat of deflation and inflame tension between the European Central Bank and Germany.

Even though prices have likely bottomed out, the recent plunge in the price of oil serves as a reminder of how geopolitically significant energy prices can be. Energy supplies form the backbone of modern industrial economies, and energy resources are critical export commodities for those who possess a lot of them. As long as fossil fuels remain the dominant source of energy — something that is likely to last at least another few decades — oil supply and oil prices will remain critical.


Policy= res publica

Freudenberg-Pilster* Der Koran hat zwei Gesichter*

30.10.14 … Der Koran spiegelt … die prekäre Lage der Muslime im siebten Jahrhundert im heutigen Saudi-Arabien wider.

Die Gewaltaufrufe beziehen sich auf die kriegerische Situation, in der Mohammed und seine Anhänger damals lebten. Der Koran insgesamt wie auch die Hadithe, die Überlieferungen über das Leben des Propheten, stellen jedoch zugleich ein einzigartiges Gesetzeswerk für ein Zeitalter des nahezu permanenten Krieges dar.

Der Koran stellte Frieden her – allerdings nur für die Muslime untereinander. Aber auch die Passagen zur Rolle der Frau sind für die damalige Zeit geradezu emanzipatorisch, da sie zum ersten Mal auch Rechte der Frau festlegten. Das Problem aus heutiger westlicher Sicht ist, dass der Koran, anders als die Bibel, als das unmittelbare Wort Gottes gilt …

Eine historisch-kritische Auslegung (Exegese) ist damit nicht möglich … Jene Passagen, die eine ständige Kampfbereitschaft einer anfangs kleinen Schar von Muslimen in einer Welt von Feinden vor 1400 Jahren fordern, können also heute nicht entschärft werden und liefern weiter Munition für militante Islamisten.

Dem Islam fehlt der dramatische Umbruch der europäischen Aufklärung, die den westlichen Menschen von religiösen Dogmen befreit hat und ihn geradezu verpflichtet, alles einer kritischen Betrachtung zu unterziehen. Zudem fehlen vor allem im sunnitischen Islam Zentralinstanzen, vergleichbar einem Papst, der allen Gläubigen verbindliche Richtlinien erteilen kann. Die überwältigende Mehrheit der gemäßigten Muslime ignoriert heute die Gewaltpassagen im Koran oder entschärft sie durch Interpretationen. Militante picken sie sich heraus.

Doch eines ist klar: Gräueltaten an Nichtkombattanten, Frauen und Kindern zumal, wie sie die Terrormiliz IS oder die nigerianische Miliz Boko Haram im angeblichen Namen Allahs begehen, sind weder durch den Koran noch durch die Hadithe gedeckt. Und die Intoleranz der Salafisten verstößt gegen jene Kultur des Wissens, die den Islam gerade in den frühen Jahrhunderten auszeichnete und ihn bezüglich wissenschaftlicher Errungenschaften dem Westen damals weit überlegen machte.


Politics: From Vision to Action

Barandat* ISIS in Central Asia*

October 22, 2014 … It has now become imperative to assess the impending security situation in Central Asia, India’s extended neighbourhood, after the recent appearance of ISIS footprints that sent shockwaves across the region … There are no confirmed reports on how many Central Asian fighters may have gone to Syria except for scattered evidence and information from online videos available on sites. The estimates vary from 500 to 1000 … To be sure, all the prerequisite – historical, political, socio-cultural – including demand for creating Caliphate in Central Asia existed even from the Soviet times. Several outfits such as IMU, IMT, HuT and others surfaced immediately after the Soviet collapse. They remained outlawed in the region but sustained their operation across from the Af-Pak throughout the 1990s backed by the Taliban and al-Qaeda. Their aim was to overthrow the regimes and establish Caliphate in Central Asia … Tajikistan faces the greatest threat in the medium term from ISIS trained jihadis returning from Syria … There is no single factor cited for motivating Central Asians to join ISIS ranks. Some are certainly driven by the spirit of jihad (righteous martyrdom) while others may be drawn to it due to ignorance and bigotry.

However, the search for employment and earnings remain the main driver.

More than 4 million migrants (Uzbeks, Tajiks and Kyrgyz) engaged in low-paid jobs in Russia are vulnerable to the jihadi network. They are often tricked into the jihadi net by unscrupulous recruiters who promise them jobs in Turkey and Europe.

One reason why Central Asian fighters find lucrative to rush to Middle East than to Af-Pak region, is because they find ISIS more inspirational, prestigious, and rewarding than fighting in Af-Pak region. Moreover, Central Asians are never empathetic towards the Af-Pak Taliban for they pose direct threat to the region.

They perhaps find other reasons like better living standards (permission to bring family, permission to marry local women) to go to Syria. It is also less hazardous to reach Syria than Af-Pak as Turkey provides easy gateway. All the Central Asian States have favorable visa regime with Turkey. There is no doubt that Central Asia has identical political environment and socio-cultural conditions for ISIS to grow. In addition, the region offers ideal geographical space and now the economic resources (oil/gas) for ISIS model to spread …

Clearly, perceptions among Central Asian officials over ISIS threats differ. Fear is that fighters could replicate ISIS model in the region. Clearly, concerns today are less about the Taliban infiltration but about trained ISIS jihadis returning to the region … At the same time, no common Central Asian strategy exists on how to deal with ISIS.

Any coordination is unlikely without the Russian initiative. Presently, the numbers are not so significant but ISIS gives qualitatively a different type of the threat mainly to Russia and China. Large number of Russian and Turkish speaking jihadis from Caucasus, Central Asia and Xinjiang is a source of concern for Moscow and Beijing as they fear ISIS trained fighters could expand their operation along the southern-belt of Russian Federation and China. Russia has been undertaking several military measures with the hope to counter such threats … For India, the Russian and Turkish speaking jihadis are unlikely to pose any immediate threat. The problem will emerge serious if they are allowed to network with other terrorist outfits in the FATA region. The IMU is part of that network and it needs careful watching by Indian security managers …



With a slide about global fossil fuel resources.

John Kemp

Senior Market Analyst



COLUMN-Efficiency, the invisible energy revolution: John Kemp

The United States is experiencing the largest and most sustained drop in oil demand since the start of the petroleum era in 1859 thanks to improvements in efficiency and the switch to alternative fuels.

Quietly and almost unnoticed by most commentators, efficiency and fuel switching are making an even bigger contribution to the North American energy revolution than hydraulic fracturing and horizontal drilling.

Fuel savings have contributed more barrels to the supply/demand balance than the combined output from North Dakota’s Bakken and Texas’ Eagle Ford.

Efficiency gains and the switch from crude oil to natural gas and biofuels have cut the consumption of petroleum products in the United States by more than 2 million barrels per day since 2005, according to the Energy Information Administration.

If consumption is adjusted for the rise in population and economic output, oil use has actually fallen by between 3 and 4 million barrels per day compared with the previous trend (

The plunge is a delayed response to the quadrupling of real oil prices since 1998 and especially after 2004, which sharpened the incentive for households, businesses and federal, state and local governments to change behaviour, enact conservation laws, and invest heavily in capital equipment designed to reduce oil consumption.

Many of the regulations and investments made in response to rising prices are still reducing oil demand today, even though prices have been steady for the last three years, and the efficiency drive is not over yet.

Vehicle efficiency standards and biofuel mandates will continue cutting petroleum consumption throughout the rest of the decade and into the 2020s even without a further rise in prices because they have been hardcoded into legislation and regulations.

Businesses have also become smarter at reducing fuel bills by optimising delivery and logistics systems, and those changes are unlikely to be reversed.

Similar lagged demand reductions are evident in Europe, leading many observers to conclude oil demand has peaked in the advanced industrial economies and that all future growth will come from the emerging economies.

Even bigger falls in consumption are possible in future if the gap between crude and natural gas prices in North America remains wide and encourages substantial switching from diesel to gas in road, rail and maritime transport.


Demand reductions as much as increases in supply explain stable oil prices over the last four years and the evaporation of volatility.

However, this is not the first time demand has dropped; consumption fell after both the first and second oil shocks in 1973 and 1979.

Previous periods of demand destruction were followed by a drop in prices and a gradual recovery in consumption as memories faded and consumers reverted to more oil-intensive behaviour.

The question is whether this cycle is about to repeat itself. Will oil prices decline over the next few years, at least in real terms, sending the efficiency revolution into reverse?

Benchmark Brent prices have already slipped below $100 per barrel, a level some analysts thought would prove to be a floor, amid signs demand is anaemic and the market is oversupplied.

In theory, lower prices are the means to rebalance the market by slowing the pace of demand destruction, and perhaps even buying back some of the consumption that has been lost, as well as curbing rising supply.

Past experience suggests a period of weaker prices will be needed to stem the loss of demand and curtail the enormous amount of investment in new production which has been taking place in recent years (and is still occurring in many areas such as Russia, China and Argentina).

But prices might have to remain lower for longer than most producers have dared to admit if the market is to rebalance fully.

There are substantial amounts of extra shale oil that could be brought into production profitably at prices well under $100 per barrel which will keep supplies ample.

On the demand side, oil will continue to face stiff competition from cleaner burning and cheaper (at least in North America) natural gas.

Crucially, much of the demand destruction has been hardwired into the system in the form of efficiency regulations and mandates that will not easily be reversed.

Even if oil prices drift lower, governments in the advanced economies are unlikely to relax the push for because it is central to their climate change strategies.

In fact, advanced countries would likely oppose any resurgence in oil demand with additional taxes and regulations.

If some demand is bought back, it will have to be in developing economies rather than in North America and Western Europe.

John Kemp

Senior Market Analyst



Middle East

At Least Five Killed in Eastern Saudi Arabia Attack

RIYADH—At least five people were killed and nine others wounded after three gunmen opened fire in a Shiite village in eastern Saudi Arabia on Monday, a police spokesman said.

“As a group of citizens was leaving a location, three masked men opened fire at them with machine guns and pistols,” the spokesman said in a statement carried by the country’s state news agency.

No motives for the attack were given in the brief statement, which added that an investigation is under way.

The village of Dalwa, where the attack occurred, is part of the oil-rich Al-Ahsa region in the country’s Eastern province.

Videos and photos posted on social media appeared to show the aftermath of the attack, which seemed to have taken place outside a Shiite religious hall.

The videos and photos couldn’t be independently verified.

The attack comes as Shiite Muslims world-wide are holding ceremonies marking Ashura, a 10-day event commemorating the death of the Prophet Muhammad’s grandson Imam Hussain in battle 1,300 years ago, which became a defining moment for the identity of the religious minority.

The incident could heighten sectarian tension in Shiite-dominated regions of eastern Saudi Arabia.

Sheikh Nemer Al Nemer, a Shiite cleric from the neighboring region of Qatif, was sentenced to death last month for his role in protests inspired by the Arab uprisings.

Shiites complain of discrimination and marginalization in the Sunni-ruled conservative kingdom. The government denies allegations of discrimination.


Eastern Saudi Arabia, the two most important maps in the oil world

Figure 1: Eastern Province, home of the oil industry: Dammam, Dhahran and the Oasis of Al-Hasa (shown here around the town of Al-Hofuf)

Following the discovery of oil in Bahrain by Chevron in 1932, the Americans discovered the first oil in Saudi Arabia directly across the water on a rise known as the Dammam Dome, in 1938. Eastern Province is also the heartland of Saudi Arabia’s Shia minority.

Figure 2: Eastern Province contains some of the world’s greatest oil fields (shown in green), including the super-giant Ghawar, by far the most productive oil field the world has ever known, which has already produced more than 65 billion barrels, as well as crucial oil-processing facilities at Abqaiq and the massive export loading terminal at Ras Tanura.

John Kemp

Senior Market Analyst






NO ONE should start writing an article about oil and gas production in Argentina without first taking a look at the Baker Hughes drilling statistics (below), which show the number of drilling rigs operating in the country is at the highest level for more than three decades, more than any country outside North America except Saudi Arabia and India (and probably China and India which are outside the Baker Hughes rig counts).

The familiar ingredients of press coverage of Argentina’s oil and gas sector usually begins with a recitation of all that is wrong with the country: a century of relative economic decline; the populist politics of President Cristina Ferndez de Kirchner; the expropriation of Repsol YPF; the country’s debt default and legal battles with the New York courts.

But there is another, far more interesting side to the story: George Soros has been increasing his stake in YPF; drilling activity is hitting record highs; and American drilling firms are moving rigs down to Argentina.

Most writers cannot get past the political risk of operating in the country, but the objective data suggests exploration and production activity is already starting to pick up significantly in response to interest in the country’s substantial shale and conventional resources.




COLUMN-EIA study removes final barrier to U.S. oil exports: John Kemp

Gasoline prices in all parts of the United States are tied to international crude oil markers like Brent rather than domestic crudes like WTI, according to a detailed study published on Thursday by the Energy Information Administration (EIA).

EIA’s study removes the last principled objection to lifting the ban on U.S. crude oil exports — namely that it would lift domestic oil prices and through them the cost of filling up at the pump.

“While crude oil prices matter to those involved in producing oil or refining oil into products, most Americans, and the policymakers who represent and serve them, are mainly concerned with the price of gasoline and other refined products,” EIA noted (“What drives U.S. gasoline prices?” Oct 30).

“The issue of which crude oil [Brent or WTI] matters most for U.S. gasoline prices is particularly relevant as policymakers in the Executive Branch and Congress consider the possibility of changes in current limitations on crude oil exports,” the agency added.

In 2013, the average U.S. household spent $2,600 buying gasoline, according to EIA. Legislators from both Republican and Democratic parties are worried in case lifting current restrictions on U.S. crude oil exports raises fuel bills for voters.

Over the last 18 months, lawmakers have repeatedly called for more evidence about the likely impact on pump prices before deciding whether to ease the current curbs, which were enacted in the 1970s in response to the Arab oil embargo (“History of U.S. controls on oil exports” Oct 24).

EIA, which is the respected and independent statistical and analytical arm of the US Department of Energy, has responded by conducting a comprehensive statistical analysis of the relationship between Brent and WTI and the wholesale cost of gasoline in the four major U.S. markets (New York Harbor, U.S. Gulf Coast, Chicago and Los Angeles).

“Brent crude oil prices are more important than WTI crude oil prices as a determinant of U.S. gasoline prices in all four regions studied, including the Midwest,” the agency found.

“The WTI crude oil price lost much of its power to explain changes in U.S. gasoline prices after 2010, when its differential to Brent crude became wider and much more volatile.”

An even more detailed examination showed U.S. gasoline prices were more closely tied to Brent than WTI both before and after 2010.

The agency concluded: “The effect that a relaxation of current limitations on U.S. crude oil exports would have on U.S. gasoline prices would likely depend on its effect on international crude oil prices, such as Brent, rather than its effect on domestic crude prices.”


EIA is too careful to say so explicitly, but the implication of the study is that lifting the export ban would raise selling prices and revenues for U.S. oil producers by increasing their access to overseas markets without raising fuel prices for U.S. motorists.

Increased U.S. oil exports might actually lower fuel bills for Americans if they increased global crude supplies and brought down the price of Brent.

EIA’s study is consistent with the findings of four other major statistical and modelling exercises conducted by private consultancies and reviewed by the Government Accountability Office on behalf of Congress (“Congressional study questions embargo-era oil policies” Oct 21).

No credible study has found evidence ending oil export controls would raise gasoline prices for American motorists.

Further studies will not help legislators make up their minds. The time for studying is over and the time for legislating has arrived.

Controls on crude oil exports are outdated and increasingly irrelevant. They harm U.S. oil producers without conferring any benefit on consumers. It is time to end them.

The president has sufficient authority to end the controls on his own, using authority conferred on him by the 1970s laws. President Ronald Reagan utilised precisely these powers to lift the controls on refined product exports in 1981 and oil exports to Canada in 1985.

Or Congress could authorise exports itself by enacting simple legislation to amend the relevant sections of the 1975 Energy Policy and Conservation Act; 1976 Naval Petroleum Reserves Production Act; 1977 Export Administration Amendments Act; 1978 Outer Continental Shelf Lands Act Amendments; and 1979 Export Administration Act.

It is also possible to envisage a mixed approach, where Congress amends the export control laws, but leaves a final decision about whether exports are in the national interest or would raise fuel prices for domestic customers to the president.

A mixed approach was used to approve exports from Alaska’s North Slope, with Congress legislating in 1995 but leaving the final decision to President Bill Clinton, who made the necessary determinations in 1996.

The question of which route is likely to be the most effective is a matter of political tactics. But once the mid-term elections are over, Congress and the White House should make resolving the export question a top priority.

John Kemp

Senior Market Analyst


The Missing Women of Afghanistan
After 13 Years of War, the Rule of Men, Not Law
By Ann Jones

On September 29th, power in Afghanistan changed hands for the first time in 13 years. At the Arg, the presidential palace in Kabul, Ashraf Ghani was sworn in as president, while the outgoing Hamid Karzai watched calmly from a front-row seat. Washington, congratulating itself on this “peaceful transition,” quickly collected the new president’s autograph on a bilateral security agreement that assures the presence of American forces in Afghanistan for at least another decade. The big news of the day: the U.S. got what it wanted. (Precisely why Americans should rejoice that our soldiers will stay in Afghanistan for another 10 years is never explained.)

The big news of the day for Afghans was quite different — not the long expected continuation of the American occupation but what the new president had to say in his inaugural speech about his wife, Rula Ghani. Gazing at her as she sat in the audience, he called her by name, praised her work with refugees, and announced that she would continue that work during his presidency.

Those brief comments sent progressive Afghan women over the moon. They had waited 13 years to hear such words — words that might have changed the course of the American occupation and the future of Afghanistan had they been spoken in 2001 by Hamid Karzai.

No, they’re not magic. They simply reflect the values of a substantial minority of Afghans and probably the majority of Afghans in exile in the West. They also reflect an idea the U.S. regularly praises itself for holding, but generally acts against — the very one George W. Bush cited as part of his justification for invading Afghanistan in 2001.

The popular sell for that invasion, you will recall, was an idea for which American men had never before exhibited much enthusiasm: women’s liberation. For years, human rights organizations the world over had called attention to the plight of Afghan women, confined to their homes by the Taliban government, deprived of education and medical care, whipped in the streets by self-appointed committees for “the Promotion of Public Virtue and the Prevention of Vice,” and on occasion executed in Kabul’s Ghazi stadium. Horrific as that was, few could have imagined an American president, a Republican at that, waving a feminist flag to cover the invasion of a country guilty mainly of hosting a scheming guest.

While George W. Bush bragged about liberating Afghan women, his administration followed quite a different playbook on the ground. In December 2001, at the Bonn Conference called to establish an interim Afghan governing body, his team saw to it that the country’s new leader would be the apparently malleable Hamid Karzai, a conservative Pashtun who, like any Talib, kept his wife, Dr. Zinat Karzai, confined at home. Before they married in 1999, she had been a practicing gynecologist with skills desperately needed to improve the country’s abysmal maternal mortality rate, but she instead became the most prominent Afghan woman the Bush liberation failed to reach.

This disconnect between Washington’s much-advertised support for women’s rights and its actual disdain for women was not lost upon canny Afghans. From early on, they recognized that the Americans were hypocrites at heart.

Washington revealed itself in other ways as well. Afghan warlords had ravaged the country during the civil war of the early 1990s that preceded the Taliban takeover, committing mass atrocities best defined as crimes against humanity. In 2002, the year after the American invasion and overthrow of the Taliban, the Afghan Independent Human Rights Commission established under the auspices of the U.N. surveyed citizens nationwide and found that 76% of them wanted those warlords tried as war criminals, while 90% wanted them barred from public office. As it happened, some of those men had been among Washington’s favorite, highly paid Islamist jihadis during its proxy war against the Soviet Union of the 1980s. As a result, the Bush administration looked the other way when Karzai welcomed those “experienced” men into his cabinet, the parliament, and the “new” judiciary. Impunity was the operative word. The message couldn’t have been clearer: with the right connections, a man could get away with anything — from industrial-scale atrocities to the routine subjugation of women.

There is little in the twisted nature of American-Afghan relations in the past 13 years that can’t be traced to these revelations that the United States does not practice what it preaches, that equality and justice were little more than slogans — and so, it turned out, was democracy.

Taking Sides

The American habit of thinking only in the short term has also shaped long-term results in Afghanistan. Military and political leaders in Washington have had a way of focusing only on the most immediate events, the ones that invariably raised fears and seemed to demand (or provided an excuse for) instantaneous action. The long, winding, shadowy paths of history and culture remained unexplored. So it was that the Bush administration targeted the Taliban as the enemy, drove them from power, installed “democracy” by fiat, and incidentally told women to take off their burqas. Mission accomplished!

Unlike the Americans and their coalition partners, however, the Taliban were not foreign interlopers but Afghans. Nor were they an isolated group, but the far right wing of Afghan Islamist conservatism. As such, they simply represented then, and continue to represent in extreme form today, the traditional conservative ranks of significant parts of the population who have resisted change and modernization for as long as anyone can remember.

Yet theirs is not the only Afghan tradition. Progressive rulers and educated urban citizens have long sought to usher the country into the modern world. Nearly a century ago, King Amanullah founded the first high school for girls and the first family court to adjudicate women’s complaints about their husbands; he proclaimed the equality of men and women, and banned polygamy; he cast away the burqa, and banished ultra-conservative Islamist mullahs as “bad and evil persons” who spread propaganda foreign to the moderate Sufi ideals of the country. Since then, other rulers, both kings and commissars, have championed education, women’s emancipation, religious tolerance, and conceptions of human rights usually associated with the West. Whatever its limitations in the Afghan context, such progressive thinking is also “traditional.”

The historic contest between the two traditions came to a head in the 1980s during the Soviet occupation of the country. Then it was the Russians who supported women’s human rights and girls’ education, while Washington funded a set of particularly extreme Islamist groups in exile in Pakistan. Only a few years earlier, in the mid-1970s, Afghan president Mohammad Daud Khan, backed by Afghan communists, had driven radical Islamist leaders out of the country, much as King Amanullah had done before. It was the CIA, in league with the intelligence services of Pakistan and Saudi Arabia, that armed them and brought them back as President Ronald Reagan’s celebrated “freedom fighters,” the mujahidin.

Twenty years later, it would be the Americans, spearheaded again by the CIA, who returned to drive them out once more. History can be a snarl, especially when a major power can’t think ahead.

Whether by ignorance or intention, in 2001-2002, its moment of triumph in Afghanistan, the U.S. tried to have it both ways. With one hand it waved the progressive banner of women’s rights, while with the other it crafted a highly centralized and powerful presidential government, which it promptly handed over to a conservative man, who scarcely gave a thought to women. Given sole power for 13 years to appoint government ministers, provincial governors, municipal mayors, and almost every other public official countrywide, President Karzai maintained a remarkably consistent, almost perfect record of choosing only men.

Once it was clear that he cared nothing for the human rights of women, the death threats against those who took Washington’s “liberation” language seriously began in earnest. Women working in local and international NGOs, government agencies, and schools soon found posted on the gates of their compounds anonymous messages — so called “night letters” — describing in gruesome detail how they would be killed. By way of Facebook or mobile phone they received videos of men raping young girls. Then the assassinations began. Policewomen, provincial officials, humanitarian workers, teachers, schoolgirls, TV and radio presenters, actresses, singers — the list seemed never to end. Some were, you might say, overkilled: raped, beaten, strangled, cut, shot, and then hung from a tree — just to make a point. Even when groups of men claimed credit for such murders, no one was detained or prosecuted.

Still the Bush administration boasted of ever more girls enrolled in school and advances in health care that reduced rates of maternal and infant death. Progress was slow, shaky, and always greatly exaggerated, but real. On Barack Obama’s watch, Secretary of State Hillary Clinton renewed American promises to Afghan women. She swore repeatedly never to abandon them, though somehow she rarely remembered to invite any of them to international conferences where men discussed the future of their country.

In the meantime, Karzai continued to approve legislation that tightened restrictions on the rights of women, while failing to restrict violence against them.

Only in 2009, under relentless pressure from Afghan women’s organizations and many of the countries providing financial aid, did Karzai enact by decree a law for “The Elimination of Violence Against Women” (EVAW). It banned 22 practices harmful to women and girls, including rape, physical violence, child marriage, and forced marriage. Women are now reporting rising levels of violence, but few have found any redress under the law. Like the constitutional proviso that men and women are equal, the potentially powerful protections of EVAW exist mainly on paper.

But after that single concession to women, Karzai frightened them by calling for peace negotiations with the Taliban. In 2012, perhaps to cajole the men he called his “angry brothers,” he also endorsed a “code of conduct” issued by a powerful group of ultra-conservative clerics, the Council of Ulema. The code authorizes wife beating, calls for the segregation of the sexes, and insists that in the great scheme of things “men are fundamental and women are secondary.” Washington had already reached a similar conclusion. In March 2011, a jocular anonymous senior White House official told the press that, in awarding contracts for major development projects in Afghanistan, the State Department no longer included provisions respecting the rights of women and girls. “All those pet rocks in our rucksack,” he said, “were taking us down." Dumping them, the Obama administration placed itself once and for all on the side of ultraconservative undemocratic forces.

Why Women Matter

The U.N. Security Council has, however, cited such pet rocks as the most durable foundation stones for peace and stability in any country. In recent decades, the U.N., multiple research organizations, and academicians working in fields such as political science and security studies have piled up masses of evidence documenting the importance of equality between women and men (normally referred to as “gender equality”). Their findings point to the historic male dominance of women, enforced by violence, as the ancient prototype of all forms of dominance and violence and the very pattern of exploitation, enslavement, and war. Their research supports the shrewd observation of John Stuart Mill, the nineteenth century British philosopher, that Englishmen first learned at home and then practiced on their wives the tyranny they subsequently exercised on foreign shores to amass and control the British Empire.

Such research and common sense born of observation lie behind a series of U.N. Security Council resolutions passed since 2000 that call for the full participation of women in all peace negotiations, humanitarian planning, and post-conflict governance. Women alter the discourse, while transforming unequal relations between the sexes changes men as well, generally for the better. Quite simply, countries in which women and men enjoy positions of relative equality and respect tend to be stable, prosperous, and peaceful. Today, for instance, gender equality is greatest in the five Nordic countries, which consistently finish at the top of any list of the world’s happiest nations.

On the other hand, where, as in Afghanistan, men and women are least equal and men routinely oppress and violate women, violence is more likely to erupt between men as well, on a national scale and in international relations. Such nations are the most impoverished, violent, and unstable in the world. It’s often said that poverty leads to violence. But you can turn that proposition around: violence that removes women from public life and equitable economic activity produces poverty and so yet more violence. As Chinese Communist leader Mao Zedong put it: “Women hold up half the sky.” Tie our hands and the sky falls.

Women in Afghanistan have figured this out through hard experience. That’s why some wept for joy at Ashraf Ghani’s simple words acknowledging the value of his wife’s work. But with that small, startling, and memorable moment came a terrible sense of opportunity wasted.

Some in the international community had taken the rights of women seriously. They had established women’s quotas in parliament, for instance, and had written “equal rights” into the Afghan constitution of 2004. But what could women accomplish in a parliament swarming with ex-warlords, drug barons, and “former” Taliban who had changed only the color of their turbans? What sort of “equality” could they hope for when the constitution held that no law could supersede the Sharia of Islam, a system open to extreme interpretation? Not all the women parliamentarians stood together anyway. Some had been handpicked and their votes paid for by powerful men, both inside and outside government. Yet hundreds, even thousands more women might have taken part in public life if the U.S. had sided unreservedly with the progressive tradition in Afghanistan and chosen a different man to head the country.

The New Men in Charge

What about Ashraf Ghani, the new president, and Abdullah Abdullah, the “CEO” of the state? These two top candidates were rivals in both the recent presidential election and the last one in 2009, when Abdullah finished second to Karzai and declined to take part in a runoff that was likely to be fraudulent. (In the first round of voting, Karzai’s men had been caught on video stuffing ballot boxes.)

In this year’s protracted election, on April 5th, Abdullah had finished first in a field of eight with 45% of the votes. That was better than Ghani’s 31%, but short of the 50% needed to win outright. Both candidates complained of fraud. In June, when Ghani took 56% of the votes in the runoff, topping Abdullah’s 43%, Abdullah cried foul and threatened to form his own government. U.S. Secretary of State John Kerry hustled to Kabul to lash the two men together in a vague, unconstitutional “unity government” that is still being defined but that certainly had next to nothing to do with electoral democracy.

Both these men appear as famously vain as Hamid Karzai in matters of haberdashery and headgear, but both are far more progressive. Ghani, a former finance minister and chancellor of Kabul University, is acknowledged to be the brainy one. After years in academia and a decade at the World Bank, he took office with plans to combat the country’s notorious corruption. He has already reopened the superficial investigation of the Kabul Bank, a giant pyramid scheme that collapsed in 2010 after handing out nearly a billion dollars in “loans” to cronies in and out of the government. (Ghani may be one of the few people who fully understands the scam.)

Abdullah Abdullah is generally credited with being the smoother politician of the two in a country where politics is a matter of allegiances (and rivalries) among men. As foreign minister in the first Karzai cabinet, he appointed a woman to advise him on women’s affairs. Since then, however, his literal affairs in private have become the subject of scandalous gossip. In public, he has long proposed decentralizing the governmental structure Washington inflicted upon the country. He wants power dispersed throughout the provinces, strengthening the ability of Afghans to determine the conditions of their own communities. Something like democracy.

The agreement between Ghani and Abdullah calls for an assembly of elders, a loya jirga, to be held “within two years” to establish the position of prime minister, which Abdullah will presumably want to occupy. Even before his down-and-dirty experiences with two American presidents, he objected to the presidential form of government. “A president,” he told me, “becomes an autocrat.” Power, he argues, rightly belongs to the people and their parliament.

Whether these rivals can work together — they have scheduled three meetings a week — has everyone guessing, even as American and coalition forces leave the country and the Taliban attack in greater strength in unexpected places. Yet the change of government sparks optimism and hope among both Afghans and international observers.

On the other hand, many Afghans, especially women, are still angry with all eight candidates who ran for president, blaming them for the interminable “election” process that brought two of them to power. Mahbouba Seraj, former head of the Afghan Women’s Network and an astute observer, points out that in the course of countless elaborate lunches and late night feasts hosted during the campaign by various Afghan big men, the candidates might have come to some agreement among themselves to narrow the field. They might have found ways to spare the country the high cost and anxiety of a second round of voting, not to mention months of recounting, only to have the final tallies withheld from the public.

Instead, the candidates seemed to hold the country hostage. Their angry charges and threats stirred barely suppressed fears of civil war, and fear silenced women. “Once again,” Seraj wrote, “we have been excluded from the most important decisions of this country. We have been shut down by the oldest, most effective, and most familiar means: by force.” Women, she added, are now afraid to open their mouths, even to ask “legitimate questions” about the nature of this new government, which seems to be not a “people’s government” consistent with the ballots cast — nearly half of them cast by women — but more of “a coalition government, fabricated by the candidates and international mediators.” Government in a box, in other words, and man-made.

Knowing that many women are both fearful and furious that male egos still dominate Afghan “democracy,” Seraj makes the case for women again: “Since the year 2000, the U.N. Security Council has passed one resolution after another calling for full participation of women at decision-making levels in all peace-making and nation-building processes. That means a lot more than simply turning out to vote. But we women of Afghanistan have been shut out, shut down, and silenced by fear of the very men we are asked to vote for and the men who follow them… This is not what we women have worked for or voted for or dreamed of, and if we could raise our voices once again, we would not call this ‘democracy.’"

Ask yourself: Would you?

Ann Jones, a TomDispatch regular, is the author of Kabul in Winter, and War Is Not Over When It’s Over, among other books, and most recently They Were Soldiers: How the Wounded Return From America’s Wars — The Untold Story, a Dispatch Books project. She and Andrew Bacevich will be in conversation November 12 at the Lensic Performing Arts Center in Santa Fe, New Mexico, as part of Lannan Foundation’s cultural freedom program.

About the book: They Were Soldiers: How the Wounded Return From America’s Wars — The Untold Story

By Walter E. Kurtz on November 30, 2013

They Were Soldiers is a book about the casualties of the war in Iraq and Afghanistan. It was written by a journalist who had covered both wars. The book starts with the account of dead American soldiers and how they are collected (“collected” is the right term, because quite often they are literally in pieces) and sent home. Here we get a glimpse of the men and women who work in the mortuary platoon, which is the army’s unit responsible for handling the bodies of dead Americans. (So who takes care of dead Iraqis and Afghans?) As you can imagine, their job is so disturbing that many end up with mental problems and become psychiatric casualties.

Although the author does not come out and say so openly, the dead soldiers are the lucky ones. I think it was Thucydides who had said that only the dead have seen the end of war. At least those dead soldiers don’t suffer anymore. Their loved one will mourn them and grieve, and then they will move on with their lives. Comparing to what follows in the next chapters, the dead and their relatives are indeed fortunate.

And what follows in the next chapters is the account of the wounded. First the process of treatment of wounded soldiers is discussed in detail. Then we get a lengthy discussion on psychologically wounded. The stories are heartbreaking. We get to read about soldier who have suffered disabling, permanent wounds such as lost limbs and/or castration. You also read about veterans who become psychiatric cases. When they return, they appear fine at first, but within months, or even just weeks, their sanity unravels and they disintegrate. Many commit suicide, engage in behavior that is dangerous to them and others, sink into severe depression, or become criminal.

These “damaged” veterans are by no means rare. Together, they number in tens, perhaps even hundreds of thousands. The cost of treating them is staggering. Not that they receive proper treatment anyway. Most are taken care of by their families who are not professional care givers and who make enormous financial and personal sacrifices to take care of them. The help that they receive from Veteran Affairs and other such organizations leaves much to be desired, to put it mildly. The system that is supposed to take care of those veterans is broken at best, and uncaring and harmful at worst. The individuals who work in the system are all well meaning and dedicated, although many are overwhelmed and a few appear to be incompetent.

Yet what this book is about is not really the horror stories about the wounded and the criticism of the broken Veteran Affairs system. This book is a condemnation of war. Not just the war in Iraq and Afghanistan, but war in general. Even had the Veteran Affairs been flawless and perfect, it would do little to reduce the horror of what war does to human beings. Even a perfect health care system cannot grow back lost limbs and genitals, and in cases of psychiatric casualties, the psychological wounds and scars stay with you for the rest of your life. And keep in mind that those veterans are young men and women. Most are barely past twenty. Their lives were only just starting, and they are already ruined.

The true tragedy about those human wrecks (I assure you, I thought long and hard before using that word) is that they were betrayed by those in whom they placed their trust. Not only that, they were betrayed multiple times. They were sent to a war sold to them under false pretenses. Once on the ground, they witnessed (even committed) atrocities under tacit approval of their commanders, sometimes even under their direct orders. When they returned home physically and/or mentally damaged, they fell under the care of a system that does very poor job, to put it mildly, of taking care of them. Moreover, their sacrifice is hushed up and kept away from the public. You often see politicians shaking hands and taking pictures with uniform-wearing, medal-bearing veterans, but do you ever see a politician taking a photo op with a veteran who is missing his arms and legs? When you go to army recruitment office, you see on the walls photos showing soldiers doing exciting, manly things and being happy about it. How come you never see pictures of soldiers attending counselling sessions because they are suffering from acute depression and are at high risk of suicide?

The wounded (be they physically or mentally wounded) are shunned like a dirty, shameful family secret. Out of sight, out of mind, as they saying goes. The generals and the politicians do know very well that if the public starts seeing on TV images of young men without arms or young women who are mentally disintegrating because they were raped by their fellow soldiers (believe it or not, it is a frequent occurrence in the army), support for wars would drop to zero in no time.

And, ask yourself, would that be such a bad thing?



*Hungary deal boosts outlook for direct Kurdish oil sales*

ERBIL, Kurdistan Region – The Kurdistan Regional Government appears close to finding a regular buyer for its oil after approving on Thursday the development of a major oil field by Hungary’s MOL Group.

MOL was the only one of dozens of foreign operators with equity stakes in Iraqi Kurdistan to make public its purchase of Kurdish crude after a cargo of 600,000 barrels was delivered to MOL’s refinery in Croatia in late August.

The integrated oil and gas company has indicated it wants to buy Kurdish crude for its European refineries on a regular basis.

Baghdad has claimed that Kurdish oil shipments that started in May via a pipeline to Ceyhan in Turkey are illegal and it launched legal action against the Kurdish Regional Government (KRG) in the US.

"MOL Group is committed to maintain its presence and increase investments in the region,” Alexander Dodds, MOL’s upstream executive vice-president said on Thursday after receiving approval to develop the Akri-Bijeel block from the KRG’s Ministry of Natural Resources.

MOL’s wholly-owned subsidiary, Kalegran, declared the block commercial a year ago.

A KRG official told Rudaw that Kurdish crude was being sold at only a modest $8 discount. Brent crude, an international benchmark is currently trading at around $87. Heavier crude from Kurdistan would attract a lower price, even without the discount.

Many analysts had speculated the discount was much larger.

The KRG has been tight-lipped about its oil deals because of their commercial sensitivity. But it also is involved in a dispute with Baghdad, which has withheld the KRG’s 17 per cent share of budgetary revenues for several months.

The Kurds have given a three-month deadline to the new Iraqi government formed last month to resolve these issues but it has not said what it would do if they are not.

In an interview with the Middle East Economic Survey earlier this month, Dodds said MOL was negotiating a long-term agreement to buy Kurdish crude. He declined to say at what price the KRG sold the 600,000 barrels to MOL earlier this year.

“For MOL upstream as a whole, we are looking to increase the size of our upstream portfolio,” he said. “Kurdistan is important to us and if the opportunity to add to our portfolio comes at the right price, we will do it.”

In August, the KRG reportedly started to allow foreign operators to market their entitlement of equity oil directly, which would help them to recoup their losses and perhaps offset the legal threat to the KRG from Baghdad.

“What’s been put on the table is that there needs to be a decision on who markets the crude from the licence areas,” Dodds said in the interview. “That’s yet to be closed.”

Baghdad made only a small protest against MOL when it bought the Kurdish oil, he said. “There was some arm-waving and a formal letter [from Baghdad] sent to us but no repercussions.”

China is also reportedly keen to become a regular purchaser. US companies were likely to remain cautious about buying Kurdish oil but European and Asian buyers would be tempted by its competitive price, Carl Larry, a former oil trader who runs Oil Outlooks & Opinions, a research firm in Houston, told Rudaw.

“In the US, the oil price is generally four to five times lower than the global price so the Kurds have a good chance to sell in Europe and Asia,” he said.

Lawyers for Iraq’s Oil Ministry have until November 13 to convince an American judge not to throw out its case to prevent the KRG from selling crude in the US via the United Kalavrvta. The tanker has been moored in international waters near the port of Galveston, Texas, since July, when Baghdad filed lawsuits to halt the delivery.

The KRG official said keeping the tanker off the US coast for months would be worth the millions in charter costs if a legal precedent was set against Baghdad.

Basil Karatzas of Karatzas Marine Advisors & Co, a ship broker in New York, told Rudaw it would make more commercial sense to turn the ship around to Asia.

“I think there will be better prospects for selling the oil to someone who will not ask many questions. I suppose with the Kalavryta staying off the US, they are trying to exhaust legal remedies and create a beachfront for selling additional cargoes once there is a decision or court order allowing for sale in the US,” he said.

“The US is flooded with domestic oil so I think it doesn’t make any commercial sense chasing this market. But I suppose setting a legal precedent is very important to the sellers.”

Larry of Oil Outlooks & Opinions said he believed Baghdad would raise the issue of independent Kurdish exports at next month’s Vienna meeting of the Organisation of the Petroleum Exporting Countries, at which the recent slide in the oil price will dominate.

“Aside from quotas, Iraq might well want to draw attention to [what it calls] illegal crude sales by the Kurds,” he said.

A total of 19.2 million barrels of oil have been exported via Ceyhan, Turkish officials have said, and around $400 million has been deposited with Turkish state lender Halkbank as a result, Reuters reported this week.



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