Baghdad, 31 January 2000

Iraq has warned that it may suspend petroleum exports - a move that could exacerbate the surge in world crude oil prices that has taken them to post-Gulf War highs.

Nizar Hamdoon, the deputy foreign minister, said in an interview with the FT that a suspension of oil exports in the coming months under the United Nations oil-for-food programme "is still a possibility".

Late last year Iraq surprised oil markets by cutting the flow of around 2m barrels a day for several weeks in protest at the way sanctions-related resolutions were being handled at the UN.

Iraq's oil revenues are mounting in a UN escrow account in Paris. Mr Hamdoon said Baghdad wants to set a limit on the funds in the account, although he refused to define that limit. The high oil prices mean that the level of funds in the account is rising swiftly.

"There's no need for money in the escrow account to go beyond a certain level," he said. "We'd be better off keeping that oil in the ground."

Iraq has grown increasingly bitter about what it sees as politically motivated delays in the UN's processing of a large number of contracts aimed at revitalising its oil industry and restoring essential services, such as power generation. Under recent phases of the oil- for-food programme Iraq has been allowed to import $300m of oil equipment and services every six months to maintain the output that finances the UN-monitored humanitarian aid programme.

The UN escrow account is used to pay for all UN operations in Iraq, but there is a large and growing surplus.

Baghdad claims that the US and British government representatives on the committee that oversees the contracts have placed a large number of them on "hold", even though much of the equipment does not fall into the "dual use" category of materials that might have a military application.

"It all has to do with the contracts on hold," said Mr Hamdoon, who as the former Iraqi ambassador to the UN has been at the centre of sanctions-related negotiations for several years.

Mr Hamdoon conceded that any suspension of oil exports would affect world oil prices but said Iraq viewed any such impact as "a secondary factor".

-- (cashtradr@aol.com), January 31, 2000

Answers

Best to do this under cover of politics before they're obliged to declare FORCE MANEURE.

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-- Squirrel Hunter (nuts@upina.cellrelaytower), January 31, 2000.

cashtradr, do you have a link for this?

-- boop (leafyspurge@hotmail.com), January 31, 2000.

Force Manure ....is that what you click on when your press release crashes the truth checker?

-- Will (righthere@home.now), January 31, 2000.

Sorry......don't know what happened to that link. It was originally posted on gold-eagle forum, Sunday night.

-- (cashtradr@aol.com), January 31, 2000.

See related thread...

hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002SVa

-- Roland (nottelling@nohwere.com), January 31, 2000.