Iraq seeks to find new outlets for surplus of oil

Jul 24, 2000 02:00 AM

Iraqi refineries are producing about 100,000 bpd of oil in excess of domestic requirements and the authorities are striving to find new outlets for the surplus, Oil Ministry officials said. The officials said a large portion of the excess products was being shipped mainly to Turkey and, in smaller quantities, to Iran, Jordan and Syria.
The cross-border trade violates UN trade sanctions imposed on Iraq for invading Kuwait in 1990, but the officials described the sanctions as "inhumane and illegal" and vowed to continue to sell their excess products abroad. Iraqi exports of crude oil and products are only allowed under the terms of a UN-authorised oil program, which now permits Baghdad unlimited sales provided that the proceeds go to a UN escrow account and used to buy food, medicine and other urgent needs.
Any other form of foreign trade by Iraq beside the one under the UN-approved deal is largely prohibited. Iraq's revenues under the program are expected to reach $ 18 bn this year if current high prices on international oil markets hold. It is not known how much of the extra products Iraq is ferrying across the borders, but the contraband trade is believed to inject millions of dollars every month into the country's coffers.

US and allied forces in the Gulf can monitor the smuggling and sometimes even intercept it, but they are powerless when it comes to the monitoring of Iraq's porous border with its neighbours. The surplus products include fuel oil, kerosene, diesel oil, gas oil and butane.
Oil Minister Amer Mohammed Rashid told that his ministry was determined to expand the business and find new outlets for its excess oil products. "The sky is the limit," he said in reply to a question about US reports that smuggling of Iraqi crude was on the rise again.

Source: AP via Newspage
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