US counters Iraq oil move

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Saturday, 2 December, 2000, 00:04 GMT US counters Iraq oil move

Ordinary Iraqis have been hit hard by the sanctions

Oil prices have fallen as major world producers pledge to compensate for any supply shortages following Iraq's decision to halt exports of crude. The United States said it was working with allies to counteract Iraq's move, which follows a row with the United Nations over pricing.

Baghdad wanted to impose a surcharge of 50 cents a barrel on oil companies - the money to be paid into an Iraqi-controlled bank account.

Iraq is the world's second-biggest oil producer But the UN says this would contravene sanctions.

UN rules require Iraqi oil revenues to go into an account in the New York, where Iraqi purchases must be approved by a UN sanctions committee as part of an oil-for-food deal.

Compensation

But there was a restrained reaction to the cut in supplies as traders had been bracing for the disruption since Baghdad first annouced its new pricing policy two weeks ago.

Instead, most traders focused on assurances from the world's largest producers and consumers that the loss of Iraqi crude would not cause any shortage in oil.

Top Opec producers, barrels per day Saudi Arabia: 8.36m Iran: 3.71m Iraq: 2.96m Venezuela: 2.93m Kuwait: 2.16m Figures for August Source: Opec

In London trading Brent Blend crude oil for January slumped $1.73 to end at $30.15 per barrel after initially rising by 30 cents.

The US National Security Council said Washington was working with International Energy Agency members and major oil on a response that would "more than compensate" for the lost volumes.

Possible moves could include the release of US petroleum reserves and a surge in production by major oil producers.

Further aid flights

Kuwait also said it is in consultation with other OPEC members of the Organisation of Petroleum Exporting Countries (OPEC) to take possible collective steps to limit any negative impact on the oil market.

Saddam Hussein has been growing steadily more confident Iraq has been exporting an estimated 2.4 million barrels of oil a day, some 5% of world trade, almost all of it through the Ceyhan terminal.

The move to halt exports was the latest twist in a deepening dispute between Iraq and the United Nations over international sanctions imposed on Baghdad 10 years ago.

Baghdad, which has the world's second biggest oil reserves, has been growing steadily more confident in recent months amid widening cracks in the sanctions regime.

On Friday, two more planes carrying humanitarian aid for Iraq took off from Paris.

Radio France Internationale reported that there were members of the French National Assembly and Senate among the 80 or so passengers.

Both Russia and France started aid flights to Iraq a few months ago to challenge the British and US interpretation of the UN Security Council's flight embargo there.

France's first flight in September sparked accusations from the US and the UK that it was in violation of sanctions.

http://news.bbc.co.uk/hi/english/world/middle_east/newsid_1050000/1050639.stm

-- Martin Thompson (mthom1927@aol.com), December 01, 2000

Answers

Stupid article for the BBC.

"Possible moves could include the release of US petroleum reserves and a surge in production by major oil producers."

Wheres the beef! as the little old lady use to say.

They still haven't delivered the last release from the reserves and all the refineries are at almost full capacity now.

I think I am getting a little jaded with these news stories. Anyone out there reading this stuff. Maybe I should post articles on Chad and dimples.

-- Martin Thompson (mthom1927@aol.com), December 01, 2000.


Martin, Folks are reading this stuff! And we're all scratching out heads along with you. The naz is DOWn and the Dow is NAZty, this all spell trouble. Little pieces of the big puzzle.

-- (perry@ofuzzy1.com), December 02, 2000.


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