The Iraqi government secured a court order to stop the offloading and sale of oil from a Kurdish tanker docked off the coast of Texas, Bloomberg said Tuesday.
U.S. Marshals have removed 1 million barrels of oil, worth about $100 million, from a the United Kalavrvta tanker docked off the coast of Texas.
Marshals have taken the cargo ashore until the dispute is resolved.
A U.S. district court judge signed an order instructing the Marshals to seize the crude after the Iraqi government claimed the oil was illegally produced and exported, the Wall Street Journal said Tuesday.
The Iraqi petroleum sector is state-controlled with the central government earning the majority of the profits.
The Iraqi government is concerned that revenues from oil sales could support Kurdish efforts for independence.
The U.S. State Department worries that independent oil sales from Kurdistan could contribute to the region breaking away from Iraq and has warned buys of the legal risks posed by these transactions.
The tanker arrived in Galveston Bay, Texas Saturday but was too large to dock at Houston ports.
It was initially cleared by the U.S. Coast Guard to deliver its cargo through ship-to-ship transport, Reuters said.
Attorneys for the Iraqi government told the Galveston-based ship-to-ship company AET Offshore Services not to unload the tanker and said that the oil is stolen property, CBS said.
Kurdistan is a semi-autonomous region in northeastern Iraq and is ruled by its own government, the Kurdish Regional Government (KRG).
The Baghdad-based central government of Iraq and the semi-autonomous KRG have been fighting over oil rights for years.
There is an estimated reserve of 45 billion barrels in Kurdish territory.