Iraq on Monday applied the brakes again on the resumption of oil sales under the United Nations oil-for-food programme by insisting on an illegal surcharge.
Just as it seemed about to restart exports, Baghdad told customers they would have to make a payment direct to an Iraqi bank account, industry sources said.
To secure cargoes, buyers would have to pay 40 cents a barrel above the prices agreed with the United Nations last week for December sales.
Under oil-for-food, buyers make payments straight to a UN escrow account. Iraq wants to regain some direct control over the revenues.
Iraqi state oil marketing organization SOMO had renewed a written notice asking for the payment and said verbally that the charge required was 40 cents a barrel.
“No way are we going to be turning a blind eye to this,” said a diplomat at the United Nations in New York.
SOMO said the charge applied immediately to sales from both permitted exports points under the UN exchange, Iraq's Gulf port Mina Al Bakr and the Turkish port of Ceyhan, the industry sources said.
Dealers had assumed that the surcharge, first raised by Baghdad in November, had been quietly dropped after December prices were settled with the UN last Friday.
Confusing the picture, later on Monday, a tanker chartered by state Indian Oil Corp., moved alongside the berth at Al Bakr. But industry sources said the tanker had yet to start loading.
Dealers speculated that India might have been excused the surcharge after the visit in November to New Delhi of Iraq's vice president and oil minister, when an agreement in principle was signed for a wheat-for-oil barter.
The continued stoppage helped push Brent oil prices up 58 cents to $27.14 after a $6.50 slump over the past two weeks.
Iraq accepts oil-for-food extension
The latest obstacle to oil sales came only hours after official notification by Iraq of its agreement to another six-month extension of oil-for-food, an exception to sanctions in place since Iraq's 1990 invasion of Kuwait.
Iraqi Foreign Minister Mohammad Saeed Al Sahhaf relayed Iraq's acceptance in a letter to UN Secretary General Kofi Annan.
In the letter, Sahhaf repeated Baghdad's rhetoric over what it says is the Security Council's bias against Iraq and its domination by the United States and Britain.
The memorandum of understanding which originally set up the programme in 1996 “was supposed to be temporary and for six months only, according to a Security Council resolution,” Sahhaf's letter, carried by the Iraqi News Agency, said.
“But America and Britain have dealt and still deal with this memorandum as a substitute for lifting the embargo and its permanent status,” it said.
“But so that our behavior is not seen as negative and to expose further those with bad intentions, Iraq has agreed to extend the memorandum of understanding ... for another six months,” the letter said.
( Jordan Times )
© 2000 Mena Report (www.menareport.com)
