Iraqi oil soon to flow

Iraq accounts for 5% of the world's crude oil exports

Iraq and the United Nations have signed an agreement which extends the oil-for-food programme for a further five months, paving the way for a resumption of Iraqi oil exports.

Baghdad suspended exports on 4 June in protest at a joint British and American proposal to revamp sanctions imposed on Iraq following its 1990 invasion of Kuwait.

Everything will be normalised, I hope as early as possible, maybe in two days

Mohammed al-Douri
Iraqi UN ambassador

The proposal was aimed at easing restrictions on civilian goods while tightening them on arms, but the plan was dropped last week after Russia said it would veto it in the UN Security Council.

Iraqi UN ambassador Mohammed al-Douri said that the country's oil exports, which account for 5% of the world's crude exports, might restart as early as the middle of this week.

"Everything will be normalised, I hope as early as possible, maybe in two days," Mr al-Douri said.

Lost profits

Industry sources say at least four oil tankers are on hand to load at Iraq's Mina al-Bakr port and at least one tanker is ready at Ceyhan, Turkey.

These are the only two ports allowed to export crude under the UN programme.

Iraq exported 2.2 m barrels per day (bpd) before the suspension and according to UN estimates, the oil-for-food programme has lost $1.3bn in the four weeks that oil sales were halted.

Facing a veto by Russia - Iraq's key ally on the Security Council - Britain and the US agreed to support a simple extension of the oil-for-food programme, something Baghdad had demanded before it would restart its oil exports.

The programme will remain unchanged until the next phase expires on 30 November.

Applying pressure

Washington and London said they would use the next five months to press for Russian support of their "smart sanctions" plan.

But Moscow - which is owed billions of dollars by Iraq for arms supplied prior to 1990 - wants to see an end to the embargo.

Iraqis have long suffered under sanctions

Correspondents say the cash-strapped giant's only hope of seeing at least some of that debt repaid is if sanctions are lifted and Russian firms allowed to invest in Iraqi oilfields.

Iraq is also pushing for a suspension or lifting of the sanctions, but under Security Council resolutions, sanctions cannot be lifted until UN inspectors certify that Iraq has dismantled its weapons of mass destruction and long-range missiles.

Weapons inspectors left Iraq ahead of US-British air strikes in December 1998 and Baghdad has barred their return.

The Iraqi Government says it has eliminated its weapons programmes and has demanded the immediate lifting of sanctions.