The Iraqi Klondike: Oil and regional trade

Middle East Report

Volumn 31, Issue 220, 2001, Pages 30-35

  Alkadiri, Raad ^a  

^a Petroleum Finance Company   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMIC RELATIONS; REGIONAL TRADE; SANCTION; TRADE PERFORMANCE;

IRAQ;

EID: 0034774551     PISSN: 08992851     EISSN: None     Source Type: Journal    
DOI: 10.2307/1559408     Document Type: Article

References (11)

1. Washington Post, July 26, 2001.
2. See Hans Von Sponeck, "Squeezed to Death," The Guardian, March 4, 2000. This point was stressed in personal communications between the author and numerous officials at UNICEF and the UN's Office of the Iraq Program.
3. The Iraqi pressure was, however, sufficient to ensure that the Security Council mandated a rollover of the Oil-for-Food program separately from 1284. Hence Iraq could resume oil exports without acquiescing formally to the continuation of sanctions.
4. Reuters, July 17, 2001.
5. These figures come from a document listing the full history of Iraq's contract requests that appeared briefly on the OIP website earlier this year. The list, which includes details of which contracts were approved or put on hold, can be found on the Uncoveriraq.com website at: http://home.att.net/-drew.hamre/docUNXLS.htm
6. Ibid.
7. In mid-July, Baghdad announced it would prefer Syrian firms for import contracts under the present phase of the Oil-for-Food program, because Damascus opposed the smart sanctions proposals. The Jordan Times, July 16, 2001.
8. This estimate assumes illicit exports of around 150,000 barrels per day (b/d) via Syria, 70,000-100,000 b/d via Turkey and around 50,000 b/d via Iran and the Gulf, sold at roughly half the market price for Iraqi crude. Exports to Jordan, which total approximately 90,000 b/ d of oil and oil products, are part of a deal that has been approved by the UN since 1991, and are not counted here as smuggling.
9. It is not only the Iraqis and the end users that profit from these arrangements. Individuals linked to Masoud Barzani's Kurdish Democratic Party (KDP) allegedly benefit financially from a deal with Baghdad that ensures the secure movement of contraband oil products to Turkey. Companies linked to the KDP are also suspected of receiving legitimate contracts to lift Iraqi oil under the Oil-for-Food program, as a result of the leadership's smuggling relationship with Baghdad. The battle over control of oil smuggling revenue has contributed to periodic internecine fighting between the KDP and its rival Patriotic Union of Kurdistan, which has left the autonomous Kurdish regions of Iraq divided into two cantons. Meanwhile, since September 1999, Turkey has imposed a tax on oil products smuggled across its southern border with Iraq, which earned it a reported $23-5 million in the first four months of operation. Reuters, January 4, 2000.
10. Even the Russian draft proposal put forward in late June during the debate over smart sanctions did not call for an unconditional lifting of sanctions, but rather for a negotiated agreement that would allow UN weapons inspectors to icturn to Iraq under the formula outlined in UN Security Council resolution 1284. Russia has continued to pursue this approach since smart sanctions were postponed. See the details of a letter from President Vladimir Putin to Saddam Hussein reported by Reuters, July 18, 2001.
11. During the discussions about smart sanctions in June 2001, France proposed a draft resolution that would allow foreign investment in the Iraqi oil industry, as did the aforementioned Russian draft. The Russians proposed that controls over Baghdad's access to its oil revenue be lifted simultaneously, which would be necessary for Iraq to even consider allowing foreign investment while some form of sanctions remain in place.