LONDON/MILAN: Italy has warned oil traders they face potential legal action from Baghdad if they buy disputed exports of crude from Iraqi Kurdistan, in the latest setback for the autonomous region in its struggle with the central government over oil sales.
The Kurdish Regional Government (KRG) loaded its first pipeline shipment of Kurdish oil onto the United Leadership tanker at the Turkish port of Ceyhan two weeks ago, in a move it said was designed to show Baghdad it controls its own oil sales.
But so far the KRG has been unsuccessful in finding a buyer for the oil, as Baghdad has stepped up pressure on countries with political and economic links to Iraq.
A letter from the Italian Industry Ministry warned traders and refineries that the Iraqi government had told its embassy in Baghdad that such crude sales were illegal, and they could face penalties from its oil marketing arm, SOMO.
“SOMO reserves the right to take legal action against the buyer of such a cargo,” said the letter, dated June 4.
Two copies of the letter were provided to Reuters by traders at separate companies, including one at an Italian refinery. A spokesperson at the Italian Department of Energy was not immediately available to comment.
While the letter stopped short of saying Italian refineries would be barred from buying the oil, it is the first sign that European countries are responding to pressure from Baghdad.
Reuters
