By Barbara Plett

Iraq has warned that its ailing oil industry will suffer long-term damage unless the United Nations authorises the immediate import of spare parts.

Iraq has been allowed to sell $5.26bn worth of oil every six months to alleviate the humanitarian impact of UN economic sanctions.

Baghdad is also permitted to buy $600m worth of spare parts every year.

But the Iraqi government accuses the United States of blocking contracts.

Political reasons

Iraq's policy of all-out production last year placed considerable strain on the ailing industry.

Oil officials say they had based their output plans on signed contracts for spare parts, most of which did not arrive or were not approved by the UN sanctions committee.

Iraq says they are blocked by the US envoy for political reasons.

Washington says it is rejecting only equipment that could also be used for making weapons.

Irreversible damage

Oil Minister Amir Mohammed Rashid has said that Iraq had to decrease its exports by 10% in January to prevent irreversible damage to its reserves.

Most urgently it needs equipment to remove water seeping into the oil fields.

UN Secretary-General Kofi Annan has warned of a major breakdown in the industry unless the Security Council speeds up approval for key spare parts.

Observers say a drop in oil production could affect humanitarian supplies bought with the revenue.

At any rate, Iraq would not be able to take advantage of a recent Security Council decision to lift the cap on oil exports, although Baghdad had anyway rejected the resolution as vague and inadequate.