SATURDAY DECEMBER 02 2000 JASSIM MOHAMMED / AP

Iraq cuts oil exports in battle with UN

FROM MICHAEL THEODOULOU IN NICOSIA

IRAQ, in defiant mood and brimming with confidence, cut off its oil exports yesterday to deprive a jittery world market of 5 per cent of its supplies as President Saddam Hussein raised the stakes his campaign against sanctions. Crude oil prices rose but were held in check by assurances from the United States and the International Energy Agency that they were ready to make up for any Iraqi shortfall. Washington had said earlier that it was ready to release more oil from its strategic petroleum reserve and that several oil-exporting countries in the Middle East, including Saudi Arabia, had pledged to pump more.

However, the extra output could take weeks to filter through and the northern hemisphere is facing a winter with limited fuel supplies.

Two weeks ago Iraq threatened to suspend its sales of 2.4 million barrels a day unless buyers paid a surcharge of 50 cents a barrel into an Iraqi bank account outside the control of the United Nations. Iraq had set its prices low enough to make room for the surcharge. But its proposal was aimed at the heart of the UN’s sanctions policy which has been to ensure that revenues from Iraqi oil sales go to the Iraqi people and not to the regime.

It was one demand too many for the UN which has recently made several concessions to Iraq, including permission for Baghdad to be paid for its oil exports in euros rather than the “enemy” dollar. The Security Council also agreed in September to reduce from 30 per cent to 25 the amount of Iraqi oil revenues earmarked to pay Gulf War reparations.

High oil prices have boosted Iraq’s funds for purchases of food and medicine to $11 billion (£7.67 billion), giving Saddam a cushion to halt oil sales for some time without increasing the suffering of his people.

In the meantime his regime will continue to receive money from unauthorised oil sales — estimated at $3 billion a year — to Turkey, Jordan, India, Pakistan and Syria.

The Iraqi leader has stepped up his campaign against the ten-year-old embargo at a time when international support for sanctions is waning and the US has been paralysed by its inconclusive presidential elections.

The Middle East crisis has also deepened the sense of injustice in the Muslim world at perceived double standards. Washington is seen to be hell-bent on enforcing every word of every UN resolution against Iraq while failing to enforce those calling on Israel to withdraw from occupied Arab lands. All this has enabled Saddam to make significant progress in recent weeks. With it has come renewed defiance.

Hours before the Iraqi oil taps were closed on Thursday, Baghdad again rejected UN proposals to allow back weapons inspectors in return for lifting the embargo despite planned talks in January with the UN to break the deadlock.

On the same day, a Jordanian plane made the first commercial flight to Baghdad since Saddam’s invasion of Kuwait ten years ago. A steady flow of humanitarian flights from the Arab world and beyond has been arriving since the summer, and last week a senior official made the first Iraqi airlines flight out of Baghdad in a decade.

In a further significant challenge to sanctions, Iraq and India made far-reaching agreements on oil and trade this week as well as greater Indian political support for Baghdad. “We are establishing long-term strategic relations and they are full-scale and not just related to oil,” said Taha Yassin Ramadan, Iraq’s Vice-President, who received a red-carpet welcome in India.

“The past week has witnessed a number of developments which cumulatively call into question how the UN Security Council is to maintain sanctions against Iraq,” said Middle East Economic Survey, an authoritative, Cyprus-based newsletter. “As international support for the policy appears to be waning, Baghdad is doing its best to puncture the embargo wherever and whenever it can.”

http://www.thetimes.co.uk/section/0,,3,00.html

-- Martin Thompson (mthom1927@aol.com), December 02, 2000