US Energy Secretary Bill Richardson on Sunday played down the consequences of any halt in Iraqi crude production, saying Gulf states would make up any potential shortfall in oil supplies.
"I would simply say that Iraq should adhere to established norms for doing business with the United Nations and the international community," Richardson told reporters on the last day of the 7th International Energy Forum in Riyadh.
"We do believe that Gulf countries or the United States could make up that shortfall" caused if Baghdad were to halt output, Richardson said. "The first option would be the Gulf states filling in that gap."
Baghdad last week informed customers they had to pay a premium of 50 cents over the barrel into an account outside the control of the United Nations and warned that contracts would be scrapped if they failed to comply.
Fears of non-compliance have raised the possibility of Iraqi crude being priced out of the market leading to a halt in exports from early December.
Iraq has been under international sanctions since invading Kuwait in 1990, but under the UN-supervised oil-for-food programme it can export crude in exchange for essential imports.
Iraq's oil revenues, estimated at around $20 billion, are currently paid into an escrow account in the New York branch of BNP-Paribas.
Iraq's oil production reached 2.96 million barrels per day (bpd) in October, 2.36 million bpd of which were exports under the programme while 600,000 barrels were for domestic consumption and cross-border trade.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)