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IRAQ SANCTIONS MONITOR Number 160 Friday, November 24, 2000

LATEST NEWS

VHS copies of the film 'Big Ben to Baghdad', the epic account of last year's journey in a 37-year-old Routemaster bus from London to the capital of sanctions-engulfed Iraq. The 65-minute-film costs A39.99 from the Mariam Appeal, 13a Borough High Street, London

Iraq May Be Reopening Oil Pipeline to Syria, Violating U.N. Embargo.

The possible reopening of an oil pipeline between Iraq and Syria, coupled with recent Iraqi efforts to get a portion of its oil revenue directly from buyers, represents yet another challenge by Baghdad of the 10-year-old United Nations trade embargo.

Oil has been flowing between Iraq and Syria in recent days, but how much remains unclear, an industry person familiar with Iraq said. Both Damascus and Baghdad have denied reports that the pipeline is carrying 150,000 barrels a day. 

One person close to the Syrian oil industry said oil was pumped but only to test the pipeline, and it wasn't for export. Iraq says it is "simply taking the necessary measures to get it ready for the eventual export of oil," U.N. spokesman Fred Eckhard said. The Syrian mission in New York denied importing oil through the pipeline, Mr. Eckhard added.Britain, nevertheless, has asked for an urgent meeting of the U.N. sanctions committee on Iraq to take up the matter of the Syrian pipeline, and also the recent gift of an airplane to Iraq from a Qatari national. 

British officials said the gift violated sanctions barring countries from selling or supplying such goods to Iraqi leadership. A British official in New York said his government has told Damascus it may purchase Iraqi crude only if the proceeds are placed under U.N. control. "If the oil is pumped without the proceeds going through oil-for-food [the U.N. program], it's illegal," the official said. 
Source: WALL STREET JOURNAL 24/11/2000

Iraq threatens again.
IRAQ threatened on Thursday to halt its United Nations-authorised oil exports unless the UN sanctions committee lifted its "holds" on Baghdad's import contracts.

"We, the Iraqi people, are thinking seriously that...we should stop exporting oil, at least until the 661 (sanctions) committee releases the 'on-hold' Iraq contracts so that we can benefit from our exported oil," the official daily Baghdad Observer said in an editorial.A third of the revenues from the oil exports are deducted to pay compensation for the 1991 Gulf War, which evicted Iraqi occupation from Kuwait, and to finance UN operations in Iraq. The daily charged that the oil-for-aid deal, which Baghdad accepted reluctantly but only as a temporary measure while pressing for a total lifting of sanctions, had turned into "a permanent UN measure crippling Iraq and harming its people."
(c) The Hindu Business Line.

LIFTING OF IRAQ SANCTIONS NOT PROFITABLE FOR RUSSIA - SHOKHIN.
MOSCOW. Nov 23 (Interfax) - The lifting of sanctions against Iraq will not be profitable for Russia, Duma Deputy Alexander Shokhin said at a conference on the oil industry and its role in expanding production, on Thursday.Announcements that the lifting of sanctions against Iraq will give Russia the possibility of receiving many billions in debts and benefiting from participation in restoring the Iraqi oil industry are groundless, he said.Commenting on the issue of Russia joining OPEC, Shokhin noted that the current position of the government, whereby Russia supports the decisions of the cartel without joining it, is correct, as oil export quotas would limit Russia's revenue.

Iran joins Arab rush to Baghdad.
Iraq and Iran have stepped up efforts to restore full diplomatic relations.The moves by the two countries, which went to war between 1980 and 1988, coincide with plans by Syria and Egypt to upgrade ties. Egypt said in early November flags would fly at the respective missions reopened at the charge d'affaires level.

Several senior-level meetings have been held between Iran and Iraq and a transport and communications agreement was signed on 6 November. Iranian officials have also suggested that any Iraqi request for a return of Iraqi Airways planes, which took refuge across the border during the 1991 Gulf war, will be considered favourably, provided the UN sanctions committee gives its approval.

Some 50 Iranian firms attended the November Baghdad international trade fair. Several firms said they had orders for hundreds of tractors and cranes, although transactions would need UN approval.

Most of Iraqi Airways' fleet of US-built aircraft took refuge in Iran in 1991. The aircraft have been gathering dust at various airports across the country, and technical difficulties might prevent their return.

US weather and Iraqi demands encourage markets.
Oil prices were in mid-November threatening to return to their recent highs on predictions of cold weather in the US and fears that Iraq may hold back some exports. The upward trend was encouraged by a decision by OPEC ministers on 13 November to postpone a decision on output levels until 17 January. OPEC also elected a new secretary-general for the next three years (see Seven Days).

A cold front was in mid-November heading for the US northeast, where heating oil stocks are about 40 per cent below 1999 levels. The US remains concerned about supply shortages despite views by market analysts and by OPEC that crude supplies would exceed demand in the coming months. OPEC ministers have expressed fears that continued production increases could bring about a market collapse after the winter. Some ministers have said output cuts may be required in the second quarter of 2001, to keep prices within the preferred range of $22-28 a barrel.

Iraq, which supplies about 5 per cent of the world's crude exports, informed its customers in mid-month that from 1 December it wants a $0.50 premium paid on each barrel of crude outside the UN-controlled accounts. Most oil companies say they will be unable to comply with the demand because it would mean circumventing UN sanctions.

On 15 November, Brent crude rose to about $1.50 a barrel below the $35.30 10-year peak reached in October. The American Petroleum Institute (API) issued data on 14 November showing a 665,000-barrel drop in heating oil stocks. This left supplies more than 30 per cent below this time in 1999.

The Department of Energy confirmed the API data on 15 November, adding that crude and gasoline stocks were up. OPEC ministers said after a meeting in Vienna on 13 November they were keeping output quotas unchanged after raising supplies four times in 2000. A communique said it would take some time for the full volume of the increases to reach markets - when "overall supply will exceed demand, consequently putting prices under pressure".

Officials from top producer and consumer nations were in mid-November due to hold a meeting in Riyadh. US Energy Secretary Bill Richardson, who was to attend the gathering, said he hoped "dialogue may help the stability of the oil market". (Middle East Economic Digest)

INAUGURATION OF SHIPPING LINE TO QATAR.
Al-Wifaq newspaper quotes from a report appearing in the Qatari A-Raya newspaper on the inauguration of a passenger and freight shipping line between Iraq and Qatar, put into operation at the end of May 2000. The newspaper notes that the line links the Port of Doha with the Iraqi Port of Al-Bakar. The newspaper further notes that additional shipping lines operate between Iraq and the UAE and between Iraq and Bahrain.

A further 2,000 Iranian PoWs still being held in Iraq.   Text of report by Iranian radio 23rd November 00

The head of Iran's commission for prisoners of war and missing-in-action military personnel [Gen Najafi] has announced that, on the basis of existing documents, a further 2,000 Iranian PoWs are still [being held] in prison camps in Iraq.

Gen Najafi went on to say that efforts by Iran to clarify the situation of Iranian PoWs and missing-in-action military personnel were being made on a continuing basis.

Police find hand grenades in truck at Iraq border. Text of report in English by the Turkish news agency Anatolia

Silopi, 23rd November: Police confiscated on Thursday [23rd November] five hand grenades in a truck in the Habur Border Gate near Silopi township of southeastern Sirnak province. Police, acting on a tip-off, stopped and searched a truck coming from Iraq to Turkey.

The police found five hand grenades in the petrol cap of the truck. The driver of the truck was taken under custody and an investigation is underway.

Iraq awaits U.N. word on December oil price ideas.

DUBAI, Nov 23 (Reuters) - Iraq will wait to see whether the United Nations rejects its December crude oil price proposals on Monday before deciding its next step, an Iraqi oil official said on Thursday.

Diplomats on the U.N. Iraqi sanctions committee said they will reject state oil marketer SOMO's proposals for December oil prices because they are too low. Asked if SOMO would revise its prices should they be rejected, the Iraqi oil official said, "we have to see." If spurned by the U.N., it would be only the second rejection of Iraq's proposed monthly prices since the oil-for-food programme began in December 1996. Baghdad then revised its price. The committee's 15 members have until Monday at 10 a.m. EST (1300 GMT) to decide whether SOMO's proposed December prices reflect fair market value. But that looks unlikely.

The U.N. oil overseers already have advised the committee that "the suggested prices are below market levels" and "do not represent fair market value."

Iraq wants prices for Kirkuk shipped to Europe to drop 30 cents (Dated Brent - $3.50); Basrah Light to the United Sates down 90 cents (second-month WTI - $8.50); Basrah Light to the Far East down 15 cents (Oman/Dubai - $1.35); Kirkuk to the United States down 65 cents (first-month WTI-$7.05); and Basrah Light to Europe down 45 cents (Dated Brent - $4.55).

Jordanian Sports Delegation in Iraq to Show Solidarity.
BAGHDAD, November 23 (Xinhua) - A Jordanian passenger plane carrying a sports delegation arrived in Iraq Thursday evening to show support for the Iraqi people reeling under the decade-old U.N. sanctions.

Upon arrival at the Saddam International Airport, Saeed Ahmed, Jordanian minister of youth and sports and also head of the delegation, said the visit was to express solidarity with Iraq and protest against the "unjust" sanctions imposed since Iraq's invasion of Kuwait in 1990.

Members of the delegation included officials from the Jordanian Olympic Committee and sports unions, sportsmen and a number of journalists. Earlier in the day, a Syrian passenger plane touched down at the same airport on a humanitarian mission to the sanctions-hit country. Jordan and Syria are among the Arab countries in support of Iraq's effort to break the air embargo insisted by the U.S. and Britain, which requires any flight to and from Iraq to get prior permission.

More and more countries, following the lead of Russia and France, have been flying planes to Iraq to show their defiance of the ban. Jordan sent a plane to Iraq on September 27, becoming the first Arab country to do so since Iraq reopened its international airport on August 17.

It also expressed readiness to resume regular flights between its capital Amman to Baghdad after a hiatus of 10 years. More than 60 flights from Arab and non-Arab countries have landed in Iraq since August and most of them did not seek approval from the U.N. Sanctions Committee.

Fifth Syrian flight lands in Baghdad.
BAGHDAD, Nov 23 (Reuters) - A Syrian plane landed in Baghdad on Thursday, the fifth such flight from Damascus in two months to protest against a decade of sanctions, the official INA news agency said. INA said the Syrian Boeing 737 plane landed at the recently reopened Saddam International Airport carrying 24 passengers, among them Indonesian doctors. Syria sent its first flight to Baghdad in two decades on October 8, carrying a 34-strong delegation headed by Minister of State for Cabinet Affairs Mohammed Saifo.

Civilian air traffic at Baghdad airport ceased when sanctions were imposed on Iraq days after president Saddam Hussein sent his invasion force into Kuwait in August 1990.

A number of countries and private groups have sent similar flights to protest against the continuation of the 10-year old U.N. sanctions. The flights have been largely symbolic and have sought to lessen Baghdad's isolation.

Iraq says Kuwaiti patrol harasses fishing boat.
BAGHDAD, Nov 23 (Reuters) - Iraq has written to Arab League Secretary General Esmat Abdel-Meguid over an incident in which it says a Kuwaiti patrol harassed an Iraqi vessel in the Gulf and beat up its sailors, the state INA news agency reported on Thursday.

A letter by Foreign Minister Mohammed Saeed al-Sahaf to Abdel-Meguid, quoted by INA, said a Kuwaiti patrol intercepted an Iraqi boat sailing in Iraq's territorial waters in the Gulf on October 10.

"A Kuwaiti patrol intercepted an Iraqi boat inside our territorial waters in Khor al-Zubair, beating up sailors before arresting them and confiscating the boat," it said. The letter urged Abdel-Meguid to intervene with the Kuwaiti authorities to "stop this aggressive act and ask for compensation for the human and material losses caused by the incident."

Algeria, Iran, Libya Agree to Do Business With Iraq in Euro.
BAGHDAD, November 23 (Xinhua) - Algeria, Iran and Libya have agreed to do business with Iraq in euro, the single European currency, a report by the official weekly Al-Zawra said on Thursday.

Following Iraq's decision in September to dump the U.S. dollar in its foreign trade, the three countries have agreed to use the euro in their business dealings with Iraq, the report quoted Iraqi Minister of Finance Hikmet Mizban Ibrahim as saying.

But the report did not mention when or where the Iraqi minister made the announcement.

The three countries joined France, Spain, Jordan and other countries that have expressed readiness to develop business with U. N.-sanctioned Iraq in the euro.

Iraq has been under sweeping U.N. sanctions ever since August 1990, when it invaded its neighboring Kuwait. The decade-old sanctions are far from over due to the vehement opposition from the U.S. and its allies.

Iraq termed the dollar as "the currency of the enemy," saying it has become "a tool for the U.S. to control the resources of the Arab countries and exploit them to serve its economy." Iraq has originally informed its oil customers to start making payments in the euro starting from November 1, but at the request of the United Nations, Iraq delayed the decision. With the world's second largest oil reserves, Iraq has threatened to stop its oil exports if its demand for payment in euro is denied by the world's leading body.

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