State Department urges US oil firms to shun '\'tainted'\' Iraqi crude
The US State Department has urged American oil companies to shun Iraqi crude imports that are "tainted" by illegal surcharges paid to Baghdad by middlemen, the Middle East Economic Survey (MEES) said Monday, April 23. "The United States is the largest consumer of Iraqi crude," the State Department noted in a circular sent to more than 20 US oil and service companies earlier this month, the Cyprus-based oil industry newsletter reported.
"We have a major responsibility to ensure that Iraq's increasingly bold efforts to thwart (UN) Security Council resolutions on its oil sales do not succeed," it said, stressing that Washington was "very concerned" by the surcharge payments. The State Department referred to trade press reports that sanctions-hit Baghdad was receiving premiums of between 25 and 30 cents a barrel from middlemen, outside the control of the United Nations.
It urged US oil firms to "take all necessary steps to ensure that any Iraqi-origin crude you acquire has not been tainted by the payment to Iraq of an illegal surcharge." Iraq has been under embargo since its 1990 invasion of Kuwait but a humanitarian programme launched in December 1996 is funded by allowing Baghdad to export crude with the revenues deposited into a UN escrow account.
To escape the UN straightjacket and secure an independent source of revenue, Iraq has since December turned to small oil companies which are prepared to pay the surcharges and sell the crude on to major firms, according to MEES. Iraq's oil exports have been on the rise since a crisis in December over the surcharges and pricing formulas, which need UN approval. In March, exports under the UN program reached a level of two million barrels per day, MEES said. —(AFP)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)