Iraq expected to keep premium for oil sales, continue US exports
Iraq is expected to hold onto a premium for its oil sales when it resumes crude exports, the Middle East Economic Survey (MEES) said Monday, adding that tankers were ready for liftings suspended since December 1.
The Cyprus-based industry newsletter said Baghdad was also set to continue US-bound exports, despite a threat to blacklist companies that supply Iraqi crude to its enemies under the UN oil-for-food programme.
And oil exports to Syria outside the programme started last month, it said. The Iraqi government, meanwhile, on Monday announced its acceptance of another six-month phase of the humanitarian programme, clearing the way for renewed exports.
Although the United Nations rejected Iraq's original pricing formula for exports that allowed for a 50 cent per barrel premium, MEES said Iraq would continue to benefit from unofficial payments.
Several companies discreetly started in October and November to pay at least 10 cents per barrel directly to Iraq, outside the UN escrow account set up for the oil revenues of sanctions-hit Baghdad, according to the weekly.
"It is expected that the 10-25 cents a barrel premium that was charged before the latest crisis will continue and this has already been factored in by the companies," said MEES.
It added that Iraqi exports through third parties to the United States were expected to continue normally since Baghdad had already announced prices for its cruds for the US market.
Iraq's official news agency INA reported on December 2 that the government was mulling a bill to sanction companies that supply Iraqi crude "to any country at war with Iraq."
Lifting’s of Iraqi crude could now start immediately, said MEES, adding that five tankers were waiting at the Gulf port of Mina al-Bakr.
The United Nations said on December 8 that its oil overseers had resolved the pricing dispute that led Baghdad, which has been under sanctions since its 1990 invasion of Kuwait, to cut off exports at the start of the month.
The oil-for-food programme allows Iraq to export crude in sixth-monthly phases to finance imports of essential goods for its 22-million population. The eighth phase of the programme ran out December 5.
In November, Iraq's oil production fell to 2.70 million barrels per day (bpd), including 2.10 million bpd under the UN programme, MEES said. It said UN-controlled exports in October amounted to 2.36 million bpd.
MEES also said Syria started on November 20 to receive Iraqi crude through a pipeline closed since 1982. Initial volumes are estimated at 150,000 bpd, due to rise to 200,000 bpd, it said.—AFP.
©-- Agence France Presse.
© 2000 Mena Report (www.menareport.com)