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Monday, 8 April, 2002, 19:34 GMT 20:34 UK
Iraq cuts off oil exports
Basra refinery
Iraq has the second highest oil reserves in Opec
Iraq has halted oil exports for the next month in protest at Israel's military campaign in Palestinian areas.

President Saddam Hussein said Baghdad would decide its next move in 30 days' time or when Israel withdrew unconditionally.

Oil prices rose by about a dollar after the announcement, to around $27 per barrel of crude.

Iraqi leader Saddam Hussein
The Palestinians spoke of "sisterly Iraq"
The Palestinian Minister of Culture and Information, Yasser Abed Rabbo, described the unilateral cut-off as an expression of "solidarity" by "sisterly Iraq", in an interview broadcast by the Arabic television channel Al Jazeera.

White House spokesman Ari Fleischer said the impact of the move was not yet clear.

"It's always an issue to see in reality how serious such a threat is," he said.

  Click here for Saddam Hussein speech

The stoppage itself was not expected to affect world supplies. But Ali Rodriguez, Secretary General of the oil producers' organisation Opec, warned that together with a current strike in Venezuela, it could trigger a global oil crisis.

Immediately after Saddam Hussein announced the decision, the Iraqi oil ministry said that oil flows through its pipeline to Turkish ports had already been stopped.

The Iraqi move comes only days after Iran's supreme leader Ayatollah Ali Khamenei called on Islamic oil-producing countries to suspend exports to "pro-Israel" Western states.

Iraq currently exports about two million barrels of crude oil a day under a United Nations programme permitted as an exception to Gulf War sanctions.

'Harming foes of Palestinians'

Much of Saddam Hussein's speech - which was carried on Iraqi television and beamed via satellite across the Arab world - focused on the turmoil between Israel and the Palestinians.

Smoke over Bethlehem
West Bank violence has triggered protests across the Arab world
The Iraqi leader said Baghdad's decision to cut oil exports was aimed at Israel and the United States, and intended to harm only those who were harming the Arab nation and Palestinians, he said.

The UK Foreign Office accused the Iraqi leader of "exploiting the suffering of the Palestinians for his own political purposes".

The BBC's Rageh Omaar in Baghdad says Saddam Hussein's decision seems to be aimed at gaining influence in the wider Arab world.

With angry demonstrations taking place from Syria to Morocco against Israeli operations in the West Bank, our correspondent says the Iraqi president is keen to be seen as a leader willing to take decisive action on the issue.

Eyes on Opec

The Iraqi stoppage is only thought likely to have a significant effect if other Arab oil producers decide to join the embargo.

But the BBC's Economic Correspondent Andrew Walker says there is little sign that any countries other than Iran and Libya would be willing to do so.

Mr Rodriguez said he was engaged in "intensive consultations" with member states about their response to Iraq's statement.

Oil prices have been moving steadily higher since February, due to the escalating violence in the Middle East.

The region supplies about 30% of world demand for oil and prices react to fears that the political situation could hamper supply.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Rageh Omaar
"It is going to have a practical impact"
Leo Drollas, Centre for Global Energy Studies
"The big question is whether the other countries in Opec will increase output."
Terence Clark, British Ambassador to Iraq 1985-89
"We have to recognise Iraq has a history of developing nasty weapons"
See also:

08 Apr 02 | Media reports
Saddam announces oil stoppage: Text
08 Apr 02 | Business
Opec warns of oil crisis
08 Apr 02 | UK Politics
Blair bids to calm Iraq fears
05 Apr 02 | Business
Iran wields oil embargo threat
02 Apr 02 | Business
Oil surges on Iraqi supply threat
08 Apr 02 | UK Politics
Blair flies back to Iraq storm
05 Apr 02 | Business
Analysis: Another oil embargo?
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