Iraq cuts oil exports

The US wants to crackdown on oil smuggling

Iraq has cut off most of its UN-approved oil exports in protest against US and British moves to introduce so-called "smart sanctions".

Iraq stopped pumping to oil terminals in Turkey and the Gulf early on Monday morning, according to Iraqi sources quoted in news reports from Baghdad.

The news helped push oil prices to a four-month high as dealers speculated on how long the suspension would last. In London trading, Brent crude was up $0.43 at $29.50.

Iraq's decision puts pressure on the Organisation of Petroleum Exporting Countries (Opec) to raise production and head off further price rises.

Opec president Chakib Khelil, speaking ahead of a scheduled Opec meeting, said: "Of course, we always meet demand in the market... whatever the reason may be."

Protest

Baghdad's move is in protest against Friday's resolution by the UN Security Council extending by a single month the existing sanctions regime under which Iraq is allowed to export oil in exchange for food and medicines.

Oil minister Rashid: some sales to continue

Previously the resolution has been extended by six months at a time.

The UN move is intended to allow the US and Britain more time to persuade other Council members to back their proposals for new, so-called "smart sanctions" against Baghdad - designed to target the Iraqi Government rather than its people.

Iraq's oil minister General Amer Mohammed Rashid says Baghdad's oil sales to neighbouring countries which lie outside the UN sanctions regime will not be affected.

Road tanker deliveries are expected to continue to Jordan and Turkey.

Mr Rashid said pipeline exports would be suspended until the UN Security Council agreed on its usual six-month extension of the oil-for-food programme.

Iraq produces about 3 million barrels a day, 2.2 million of which are exported under the present sanctions rules via official routes - about 8% of total Opec output