Opinion:The Iraqi reopening of the shared Iraqi-Syrian pipeline

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The Iraqi reopening of the shared Iraqi-Syrian pipeline

Opinion Of The Week Oil Navigator Washington, DC

As the U.S. sinks deeper and deeper into the muck of a disputed presidential election and the Middle East lurches ever closer to war, Iraqi President Saddam Hussein continues to go about picking apart the U.S.-backed embargo. His latest victory appears to have been in Damascus, which has agreed to take the necessary steps to reopen the shared Iraqi-Syrian pipeline – though it is unclear just now whether it is being done with or without U.N oversight. The twin pipeline, which has a combined nameplate capacity of 700,000 b/d, was closed in 1982 during the Iran-Iraq war. Syria has been using one of the lines, with capacity of 400,000 b/d, to transport natural gas within its borders. The other line, with a 300,000 b/d capacity, has remained closed.

It was kept shut all these years largely because former Syrian President Hafez al-Assad never saw the need to throw Saddam a lifeline as the Iraqi leader made one fatal foreign policy decision after another. But now, things are different. Damascus and Baghdad need each other -- and Saddam's a lot smarter.

The Iraqi president would be the first to admit that he doesn't really need another outlet for his oil. Saddam could just as easily export an equivalent amount of oil through the Turkish pipeline to Ceyhan and by tanker through the Gulf. And the way things have been going in the Gulf, he could probably even talk Saudi Arabia into exporting some of its oil. So with the Iraqi-Syrian pipeline, what Saddam is after are friends, allies who will help Baghdad break out of its isolation.

Syria and Lebanon are important to Saddam because they are the only front-line states with Israel who do not have diplomatic relations with Tel Aviv. In addition, Damascus continues to have an enormous sway over the Gulf states, including Iran. Most recently, it was Syrian President Bashar al-Assad who insisted that Qatar break relations with Israel -- expelling Israel's trade mission in Doha -- before Qatar would be allowed to host the summit of the Organization of Islamic States from November 10th-12th. As much as Qatar's leader, Emir Sheikh Hamad bin Khalifa al-Thani, would have preferred to just ignore the Israeli presence in his capital, at the end of the day he could not resist Syrian objections, particularly after they were supported by Saudi Arabia and Iran.

That's the kind of power for which Saddam has a keen appreciation, and he is willing to pay a premium to harness it for his own interests. The Iraqi president is also very aware the U.S. needs Syria for the peace process – and it’s more true than ever since the Palestinian track went up in flames in September. If and when things die down in the West Bank and Gaza, we can count on a parade of American diplomats showing up in Damascus looking for Syria's help in making sure everyone returns to the peace table. If Damascus were to press Iraq's case, Saddam reasons, it would be hard for Washington not to listen. The Iraqi leader figures that if he minds his p's and q's in Damascus, al-Assad just might sneak him in the back door of the peace process.

There is no question that when it comes to Syria and Lebanon, Saddam is in it for the long haul. During the last two years, Syrian and Lebanese businessmen have been making the long overland trek to Baghdad -- and increasingly they've been coming home with some fantastic contracts. Also, Iraq has promised Lebanon that it will provide whatever throughput guarantees it needs to finance refurbishing of the damaged Tripoli refinery. Lebanon has not been able to do anything with the unit because cost estimates for fully restoring the refinery run as high as $800 million.

Saddam has also let it be known that any contracts related to the Iraqi-Syrian pipeline or the Tripoli refinery will go to Lebanese and Syrian companies. With both Syria and Lebanon's economies in the doldrums, this message has had a lot of resonance.

The Iraqi leader’s ultimate aim is still to make himself noticed in Washington and find a way out of the decade-old U.N. sanctions. Throwing out the U.N. weapons' inspectors in December 1998, driving Venezuelan President Hugo Chavez around Baghdad in August, threatening Kuwait, fighting for payment in Euros,and putting out false rumors about his health hasn’t appeared to do any good. So he's decided to do it the hard way -- by cementing Iraq's position as a swing producer in OPEC. If one day Saddam decides to stop producing oil, he's not only going to take a lot of badly needed oil off the world's oil markets, but also annoy a few countries who need Baghdad back in the game of nations. So while the Americans recount their votes, Saddam is still out campaigning -- and doing quite nicely, thank you -- for his own grand agenda.

http://www.petroleumworld.com/sunday1126A.htm

-- Martin Thompson (mthom1927@aol.com), November 26, 2000


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