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Friday, 24 March, 2000, 04:17 GMT
Iraqi oil smuggling warning
Russian tanker
This Russian tanker was caught smuggling Iraqi oil last month
By Mark Devenport

Oil smuggling through the Gulf is now running at record levels according to the naval chief who patrols the region.

US Vice-Admiral Charles Moore briefed UN diplomats behind closed doors and afterwards would not comment on the details.

But Western officials confirmed that the admiral reported a sharp increase in Iraqi oil smuggling since September last year. It is a trend apparently stimulated by the rise in world oil prices.

In financial terms, the value of the sanctions busting is estimated at anything between half a billion and a billion dollars per year.

If the smuggling continues at present levels, officials say the total for the year 2000 could reach 4.8 million tonnes - more than the previous four years combined.

The smugglers ship their oil, often in unseaworthy vessels, from southern Iraq through Iranian territorial waters.

False papers

That way, they avoid detection by the multi-national interception force, which polices the UN sanctions but which can only operate in the international waters in the Gulf.

Diplomats say the navy of the Iranian Revolutionary Guard charges a toll of $50 per tonne of oil, a sum which not only secures right of passage, but which also buys the smugglers false papers covering up the original source of their oil.

The crude oil is shipped across the Straits of Hormuz to countries such as the United Arab Emirates, and then sold on to a range of customers, including some in India and Pakistan.

On two separate occasions in 1998, Iran shut down the trade by denying the use of its waters to the smugglers.

After the briefing, US officials expressed their concern that the money raised by oil smuggling was not going towards the UN's humanitarian programme in Iraq, but was instead being funnelled back to bolster the rule of Saddam Hussein.

On Friday, the UN Security Council will discuss the humanitarian programme in Iraq, amid criticism that the UN sanctions are having a far more severe impact on Iraqi civilians than they are on the authorities in Baghdad.

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See also:

14 Feb 00 | Middle East
'Lost generation' faces bleak future
06 Feb 00 | Middle East
Tanker 'smuggling' Iraqi oil
03 Mar 00 | Business
Opec's target - $25 per barrel
08 Feb 00 | Middle East
Gulf sanction busting patrols boost
11 Feb 00 | Middle East
Oil scramble warning
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