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Bulk of Iraqi oil exports end up in United States, U.N. says

Copyright (c) 1999 Nando Media
Copyright (c) 1999 Associated Press


BAGHDAD, Iraq (December 1, 1999 11:45 p.m. EST - Nearly 1 million barrels per day of Iraqi crude oil reached U.S. markets during the past six-month phase of Iraq's U.N.-approved oil-for-food program, according to a statement released Wednesday by the United Nations.

The statement did not say how the oil arrived in the United States, which bars direct trade links with Iraq. Iraq's oil export arm - SOMO - shuns selling directly to firms from both the United States and Britain due to their tough stand on U.N. sanctions.

SOMO officials, speaking on condition of anonymity, said the United States was buying Iraqi crude through Russian intermediaries who receive preferential treatment from Iraq as a reward for their government's sympathetic stand on the sanctions. Almost all Iraqi crude that goes to the Russians, estimated at 40 percent of total Iraqi sales, lands in the United States.

The oil-for-food program permits Iraq to export $5.2 billion every six months in order to enable the government to buy food, medicine and other humanitarian goods for Iraqis suffering under sanctions imposed after Iraq's 1990 invasion of Kuwait.

But Iraq halted the exports last week to express its indignation at a U.N. offer of only a two-week extension for the oil program, the latest phase of which expired on Nov. 24.

The last phase of the 3-year-old program was most profitable for Iraq. Firmer oil prices on international markets helped it earn $7.45 billion in six months.

The halt of exports at current prices costs Iraq more than $40 million a day.

The U.N. statement, released in Baghdad, said Iraqi exports totaled 389.6 million barrels, the highest since the start of the oil deal. Of that, about 39 percent went to the United States, 45 percent to Europe and the rest was purchased by countries in the Far East, Brazil and Africa.

Also Wednesday, Iraq's Deputy Prime Minister Tariq Aziz met Russian officials in Moscow to seek their help in easing U.N. sanctions.

Russia favors the easing or lifting of sanctions against Iraq and reviving trade, in part so that Iraq can start paying it back a multibillion-dollar debt. Iraq hopes that Moscow will help push a resolution easing the sanctions through the U.N. Security Council.

Aziz met with Russian Foreign Minister Igor Ivanov and Russian Prime Minister Vladimir Putin.

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