MEES: Iraq Set to Suspend Oil Exports in Coming Days
Iraq's oil exports are expected to grind to a halt in the coming days due to a revenue dispute with the United Nations, depriving world markets of 2.3 million barrels a day, the Middle East Economic Survey said Monday.
"Iraq's current strategy is to try to establish independent accounts outside the control of the UN, while the (UN) sanctions committee affirmed informally on November 18 that it would not be able to do so," the industry newsletter MEES said.
"MEES soundings indicate that until this problem is resolved, a disruption of Iraqi oil exports can be expected."
Iraq, which has been under sanctions since it invaded Kuwait in 1990, is authorized to export crude in six-monthly phases under UN control to finance imports of essential goods for its 22-million population.
The current phase runs out on December 5.
Ahead of the renewal, Baghdad has informed clients they have to pay a premium of 50 cents per barrel into an account outside the control of the United Nations from December 1 and warned that contracts would be scrapped if they failed to comply.
The premium would also amount to a violation of the sanctions regime.
Iraq threatened on Thursday to halt its UN-authorized oil exports and put the squeeze on the already tight world oil market unless the UN sanctions committee lifted its curbs on Baghdad's import contracts.
But oil experts said Baghdad was crying 'wolf'.
"There have been so many threats and problems that people are not going to take any action until they actually see a definitive declaration that Iraq is doing it," GNI analyst Lawrence Eagles said last week -- NICOSIA (AFP)
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