A reduction in Iraqi oil exports could lead to more suffering for Iraqis by draining money from the UN-sponsored oil-for-food program that allows the sanctions-hit country to buy essential commodities, Secretary-General Kofi Annan has said, quoted by agencies.
Iraq temporarily halted oil exports in December in a pricing dispute with the United Nations and has since only resumed modest exports. Annan said Tuesday that had led to a loss of $1.8 billion in oil revenues by the end of January, according to the Associated Press.
Annan called on Baghdad to increase oil sales, saying there is no alternative to the oil-for-food program as long as sanctions remain in place. It is essential for Iraq and the Security Council “now more than ever,'' to stop inserting politics into the aid program, he said.
The New York Times reported Wednesday that Iraqi officials have begun demanding kickbacks and illegal commissions from foreign companies seeking to sell humanitarian supplies in Iraq.
The paper quoted unidentified diplomats and UN officials saying Iraqi officials required companies to pay bogus fees or hide commissions behind false prices for commodities such as wheat, sugar, rice or cooking oil. The money would then be deposited in foreign accounts for Iraq.
The United States confirmed the accusations Wednesday saying there is evidence that foreign companies are paying illegal kickbacks demanded by Iraq on humanitarian goods, according to the AP.
"I'm sure it is happening," acting US Ambassador James Cunningham told the agency. "There's not a lot of hard evidence, but there is evidence that it's happening. We don't know to what degree."
According to a report by AFP on Wednesday, Iraq's oil exports under the oil-for-food program were stable last week, totaling 12.3 million barrels, the UN said Wednesday.
The exports, through eight loadings, generated revenue estimated at 252 million euros (234 million dollars), the office of the Iraq program said in its weekly update.
Currently, there are 116 approved contracts awaiting completion for more than 315 million barrels of oil, said the agency.
Iraq all but ceased exporting oil for seven weeks in December and January at the start of the current 180-day phase of the oil-for-food program.
Its exports have picked up since then, but remain below the weekly average of 14.7 million barrels recorded during the previous phase.
Meanwhile, Radio Free Europe reported on its website that Syria is considering an end to Iraqi oil smuggling in response to a demand set by US State Secretary Colin Powell during his recent visit to Damascus.
The report said that Syria has expanded its ties to Iraq in recent months, notably by re-opening an oil pipeline which Baghdad is reported to have used to smuggle $2 million worth of oil daily. But during Powell’s visit, Syrian President Bashar al-Assad said he would place the pipeline under UN supervision, a move that would help re-energize sanctions on Iraq.
The pipeline runs from Iraq's northern Kirkuk oil fields to Syria's Mediterranean port of Baniyas. Since it was re-opened in November, oil experts say it has been carrying some 100,000 to 150,000 barrels per day into Syria, said the radio, adding that the trade is estimated to earn Iraq up to $2 million daily – Albawaba.com
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