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The BBC's Barbara Plett in Baghdad
"Iraq continues to raise the stakes"
 real 56k

Sunday, 3 December, 2000, 22:25 GMT
Iraq sticks to oil price formula
Iraqi oil minister Amer Rashid
Amer Rashid says US pressure created the impasse
Iraq says it will stick to its decision to introduce a new pricing formula for its oil exports, but is optimistic the dispute over its blockade of oil could be resolved.

Iraq halted its oil shipments on Friday after the United Nations rejected its proposal to charge customers a surcharge outside the oil-for-food programme agreed with the UN.

The Iraqi oil policy has been always aimed at stability of the world market

Oil minister Amer Rashid
The Iraqi oil minister Amer Rashid said that oil overseers who advised the UN had come under American political pressure over the surcharge.

He said that it was not Iraq's policy to disrupt the market, but if its arguments were not accepted, that would be the UN's problem, not Baghdad's.

Extra funds

Mr Rashid said he is scheduled to meet UN officials on Monday, which "could result in a solution" to the current blockade.

Iraq has said it will resume exporting its crude to fulfil contracts that have already been agreed under the current six-month phase of the UN programme.

The BBC correspondent in Baghdad says oil traders have been pointing out that Iraq set its official price low enough to leave room for a surcharge, which it wants customers to pay directly to Baghdad.

Under programme, Iraqi oil revenues to go into an account in the New York, where a sanctions committee can monitor the money's use.

French delegation arrives in Baghdad
A humanitarian delegation arrived in Iraq on Saturday
Iraq's proposal was seen by the UN as part on an attempt to get round UN controls on Iraqi profits.

Baghdad argues that it was not getting enough from its sales under the UN programme and needed extra funds to maintain its oil fields and equipment.

Diplomatic move

In what correspondents describe as a further challenge to sanctions, Iraq is to shortly open new embassies in Ukraine, Belarus, Kazakhstan and Azerbaijan.

The decision was announced by the Iraqi foreign minister, Mohammad Said al-Sahhaf on Sunday

Iraq has 62 embassies around the world, and announced last month that it had appointed its first ambassador to South Africa.

Also on Sunday, two more international flights arrived in Baghdad overnight, from Italy and Ukraine.

The Italian plane carried a delegation of 40 political and cultural figures.

The Ukranian delegation is made up of eight officials, who will hold talks with the Iraqis on ways of improving relations.

This followed the arrival of 115 European politicians, clergymen and representatives of aid organisations on a flight from Paris.

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