Thursday, 30 November, 2000, 20:53 GMT US to counter Iraq oil threat

The US says it and its allies will take swift remedial action if Iraq carries out a threat to halts its oil exports at midnight Baghdad time (2100 GMT).

The US is prepared to respond to Iraq if they take these steps US Energy Secretary Bill Richardson Energy Secretary Bill Richardson said Washington was ready to release more oil from its strategic petroleum reserve, and would do so quickly if needed.

Baghdad has told its clients that it will not release crude shipments after the midnight deadline unless buyers pay a special surcharge of 50 cents a barrel into an Iraqi-controlled bank account.

Such a move would breach Gulf War sanctions that require all income from oil transactions to pass through the United Nations under its oil-for-food programme.

"The US is prepared to respond to Iraq if they take these steps," US Energy Secretary Bill Richardson told reporters. "We have good, fast contingency plans."

UN sanctions were imposed on Iraq 10 years ago He added that several oil-exporting countries in the Middle East, including Saudi Arabia, had pledged to compensate for any shortfall.

World markets have reacted nervously to the threat. Iraq has the second largest oil reserves of any country.

Correspondents say a halt to its estimated output of 2.4 million barrels a day could stop any decline in international crude prices.

Tankers turn away

The UN says Iraq's proposed oil price does not reflect a fair market value.

It says Iraq's customers should continue loading crude, but pay for it later.

"Loadings of oil can continue without a pricing mechanism, but until there are UN-approved prices, no payments can be made for the oil lifted," UN spokesman Fred Eckhard said.

By Thursday, however, many ships that had been queuing for Iraqi oil at outlets in the Gulf and Turkey had turned away.

Iraqi confidence

Reports say the already high level of oil prices has boosted Iraq's funds for purchases of food and medicine to about $11bn, enabling Baghdad to sustain a halt in oil sales for some time.

Iraq's Tariq Aziz has rejected new UN weapons inspections Iraq has been growing steadily more confident in recent months amid widening cracks in the sanctions regime.

Earlier on Thursday, Baghdad again rejected new weapons inspection proposals.

Deputy Prime Minister Tariq Aziz responded with a blunt "No" when asked whether Baghdad would accept a mission under recently-appointed chief inspector Hans Blix.

His remarks came a day after UN Secretary-General Kofi Annan said he plans to start talks with Iraqi officials early next year aimed at breaking the deadlock over weapons inspections.

Inspectors have not been allowed into Iraq since the US and the UK launched air raids on Baghdad nearly two years ago.

The UN says sanctions imposed on Iraq after its invasion of Kuwait in 1990 will only by lifted when inspectors have verified that Iraq no longer maintains alleged weapons of mass destruction.

http://news.bbc.co.uk/hi/english/world/middle_east/newsid_1048000/1048765.stm

-- Martin Thompson (mthom1927@aol.com), November 30, 2000

Answers

"We have good, fast contingency plans."

What the hell does that suppose to mean. This guy is something else.

-- Martin Thompson (mthom1927@aol.com), November 30, 2000.