IRAQ SANCTIONS MONITOR Number 165 Monday December 4, 2000 LATEST NEWS++++++ FRESH FROM ITS INTERNATIONAL PREMIERE....... 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 £9.99 from the Mariam Appeal, 13a Borough High Street, London+++++++++++++++++LATEST ______________________________________________________ Military spokesman reports US, UK sorties on 4th December. Text of report by Iraqi TV on 4th December The lofty and valiant Iraqis, led by leader President mujahid Saddam Husayn, may God watch over him, are continuing their resistance against the US and UK evil ravens. They are showing heroic determination to repulse all the lowly attempts through which the enemies of God and humanity, supported by the traitors of the Arab nation, the rulers of Saudi Arabia and Kuwait who extend direct support to those failing ravens, attack Iraq. Such attacks are an attempt to obstruct Iraq's pan-Arab role in reviving jihad to liberate Palestine and its capital, holy Jerusalem, from the claws of the filthy Zionists. A military spokesman for the Air Defence Command said in a statement to the Iraqi News Agency [INA]: At 0945 [0645gmt] today, the US and UK evil ravens desecrated the sanctity of our airspace coming from the Saudi and Kuwaiti airspace with the direct support of the ruling regimes in Saudi Arabia and Kuwait. The hostile ravens carried out 12 combat sorties from the Saudi airspace and 18 combat sorties from the Kuwaiti airspace, backed by the AWACS aircraft from the Saudi airspace and an A2-C plane from the Kuwaiti airspace. They flew over areas in the governorates of Basra, Dhi Qar, Al-Muthanna, Wasit, Al-Qadisiyah, Al-Najaf and Karbala. They were confronted by our valiant missile forces which forced them to flee our airspace to the bases of evil and vice in Saudi Arabia and Kuwait. Thus, the number of combat sorties carried out by the enemy ravens since the Day of Conquest on 17th December 1998 up to the time of drafting this statement has reached 14,185 from the Saudi airspace and 7,632 from the Kuwaiti airspace. The spokesman added: The US and UK evil ravens today desecrated the sanctity of our airspace coming from the Turkish airspace with the direct support of the Turkish side and backed by an AWACS plane from its airspace. They carried out 18 combat sorties from the Turkish airspace and flew over areas in the governorates of Dahuk and Irbil. They were confronted by our heroic missile forces which forced them to flee our airspace to the bases of evil and aggression in Turkey. This brings to 5,644 the total number of combat sorties carried out by the ravens since the Day of Conquest on 17th December 1998 up to the time of drafting this statement. The overall number of combat sorties carried out by the ravens from the Saudi, Kuwaiti and Turkish airspace has thus far reached 27,461. _______________________________________________ Iraq crude boycott targets U.S. oil import reliance. NEW YORK, Dec 4 (Reuters) - Iraq's decision to impose a crude oil export boycott on the U.S. comes at a time when America's refiners have become more dependent on Baghdad's oil than ever before. U.S. thirst for Iraqi crude has doubled in the past two years to some 750,000 barrels daily (bpd) - nine percent of total U.S. oil imports - with No.1 U.S. oil firm Exxon Mobil, the No.2 Chevron and independent refiner Premcor leading the way. Other purchasers Iraqi oil for their U.S. refineries include major BP and other leading independent refiners Koch Petroleum, Valero and Tosco. While U.S. oil companies do not have official contracts to buy Iraqi oil under the OPEC producer's oil-for-food program with the U.N., they can import quite legally through oil trading middlemen. The imports were threatened at the weekend when Iraq said it would boycott companies and countries that sold its crude oil to countries it regards as hostile. "Any company found supplying Iraqi crude to a country in a state of war with Iraq will be put on the blacklist and there will be a partial or full ban in dealing with it," said Iraqi Trade Minister Mohammed Mehdi Saleh. Although the statement did not name countries Baghdad considered hostile, it was clearly referring mainly to the United States, which led the 1991 Gulf War against Iraq. At a time when U.S. winter stocks of crude and refined products are already running low, the threats may scare some companies from importing crude, according to some buyers of Iraqi crude. "People are not buying Iraq crude because they are not going to run the risk of getting into trouble," said one oil trader. Iraq's move highlights the growing U.S. dependence on imported oil, as robust demand at home pulls away from declining domestic production. Baghdad's penetration of the U.S. oil market has now surpassed pre-Gulf War levels, when exports were averaging around 500,000 bpd, Department of Energy figures show. In recent months, ExxonMobil has been taking in some nearly 200,000 bpd, while Premcor has been importing 130,000 bpd. Yet the oil market's muted response to Iraq's recent stoppage to all its crude exports has suggested that importers may not be as vulnerable to a disruption in Iraqi supply as has been feared, analysts say. Crude prices have slid more than $2.50 a barrel since the Iraqi halted oil exports Friday over a pricing row with the U.N.. Traders say that lofty prices of above $31 have already taken into account the threat that Iraq could disrupt its exports ahead of winter. "Saddam Hussein's gambit appears to have failed rather miserably," said Peter Beutel of Cameron Hanover in Connecticut. Traders say Iraq's refusal to sell to the United States could see more of its crude heading to the Far East, displacing oil from other Gulf sources such as Saudi Arabia. Saudi Arabia, the only OPEC nation with significant production capacity, has vowed to fill any disruption from Iraq, a Saudi source told Reuters on Monday. "As long as overall world supply doesn't change, it's not going to be too big an issue," said a Premcor spokeswoman, "We assume it's just going to move some barrels around." In addition, the United States reiterated on Monday that it was ready to dip into its own strategic crude reserves to counter an Iraqi supply disruption. "We are ready to take action to add supply very quickly if the situation should warrant," State Department spokesman Richard Boucher told reporters. Still, some traders question whether Iraq will be able to carry out its threats. "Where does Iraq think its oil is going to go if it doesn't go to the U.S.?" asked one trader with a U.S. major oil company. ______________________________________________________ Sudanese president reiterates solidarity with Iraq, to visit Baghdad. Text of report by Iraqi radio on 4th December Sudanese President Lt-Gen Umar Hasan al-Bashir has said that he intends to visit Iraq. In an exclusive statement to the Iraqi News Agency [INA] correspondent today, Al-Bashir said that he intends to visit Iraq to express solidarity with it and enhance the good ties binding the two sisterly countries. The Sudanese president lauded the Sudanese-Iraqi relations and described them as good and strategic, noting that they will witness noticeable development in the forthcoming stage. The Sudanese president denounced the treacherous aggressions launched by the United States and Britain on Iraq and demanded an end to them. He also denounced the unjust blockade imposed on Iraq and called for lifting it immediately. _____________________________________________________ UN, Iraq to discuss Dec oil prices Mon at 2000 GMT. NEW YORK, Dec 4 (Reuters) - Iraq's State Oil Marketing Organization (SOMO) and United Nations oil overseers will discuss December oil prices by telephone at 3 p.m. EST (2000 GMT) on Monday, a U.N. official said. The official said the overseers are hopeful of resolving the rift over December prices that has led to last Friday's stop in oil exports. Iraq's U.N. representative Saeed Hasan also said he was hopeful of a resolution that could lead to a resumption of oil exports. "Hopefully today," Hasan said after he was asked when he thought the two sides would agree on December oil prices. "Why not? If the overseers are flexible." "Hopefully today," Hasan said when he figured the two sides would agree to December oil prices. "Why not? If the overseers are flexible." Earlier Monday, Hasan said the two sides are five to 20 cents apart on agreement for December oil prices. Last week, the U.N. Iraqi sanctions committee rejected SOMO's proposed December price plan as too low. The committee rejected the prices on advice from the overseers. Western diplomats on the committee say they will approve December prices if the overseers declare them "fair market value." _____________________________________________________ Head of Chechnya to visit Iraq, Libya to raise aid. Text of report in English by Russian news agency ITAR-TASS Gudermes, 4th December: Chechen head Akhmat Kadyrov said he plans to visit Iraq and Libya to discuss assistance to his republic. He told journalists today that the programmes of these have been prepared and the timeframe may be determined after all formalities have been completed. Source: ITAR-TASS news agency, Moscow, in English 1625 gmt 4 Dec 00. ______________________________________________________ Jordan's Private Airlines Cuts Ticket Prices for Iraq. AMMAN, December 4 (Xinhua) - Jordan Aviation (JA) has decided to cut the ticket prices for potentially lucrative flights between Amman and the Iraqi capital of Baghdad, aviation sources said on Monday. JA, Jordan's only private airlines, has announced it would reduce the round-trip airfare to Baghdad by some 30 percent to 210 U.S. dollars, which will take effect as of January 1, the sources added. The private airlines took the decision after Jordan's national carrier, Royal Jordanian (RJ), made the first round trip last Friday to Baghdad in a decade. RJ charged 300 dollars for a return ticket. The flight had all hallmarks of a commercial flight but RJ termed it as a humanitarian mission flying medicine to the sanctions-hit Iraqi people. So far, Jordan Aviation has operated eight chartered flights to Baghdad, carrying delegations from local and international professional unions and businessmen under the name of humanitarian reasons. Regular and commercial flights to and from Iraq are banned under United Nations trade embargo imposed after Iraq's 1990 invasion of Kuwait. Jordan is the only land exit for Iraq and it takes more than 10 hours to drive through the poorly maintained 1,100-kilometer highway between Amman and Baghdad. The JA received last November its first plane, a Boeing 737, and was hoping to add soon a 140-seat Boeing 737 to its fleet, company sources said. _______________________________________________________ Iraqi leader Saddam Husayn confers with son Qusayy, defence minister. Text of report by Iraqi radio on 4th December Staff Field Marshal Saddam Husayn, president of the republic and commander-in-chief of the armed forces, may God watch over him, met with Staff Gen Sultan Hashim Ahmad, minister of defence, and Qusayy Saddam Husayn, supervisor of the Republican Guard. Source: Republic of Iraq Radio, Baghdad, in Arabic 1130 gmt 4 Dec 00. ______________________________________________________ Iraq says Jordan,Tunisia agree to return airliners. BAGHDAD, Dec 4 (Reuters) - Jordan and Tunisia have agreed to hand back Iraqi civilian airliners impounded since the Gulf War, Iraq's foreign minister was quoted as saying on Monday. Mohammed Saeed al-Sahaf told the weekly Nabdh al-Shabab newspaper that work to make the planes airworthy had already started. He said Iraq was also putting pressure on Iran to release other Iraqi planes sent to Tehran to escape bombing during the 1991 Gulf War which followed Iraq's invasion of Kuwait. "Jordan and Tunisia have recently taken a decision releasing 10 Iraqi civilian planes held in these two countries," Sahaf was quoted as saying. Aviation sources say Iraqi Airways, grounded since the Gulf War, has 37 planes, including 15 Boeing jetliners and 22 Russian-built Ilyushin 76s. The sources say four Boeing 727s and two 707s are in Amman. Four planes are in Tunis while another five Boeings were in Tehran together with all 22 Ilyushins. Jordanian aviation sources told Reuters in Amman that they did not know of any decision to return the planes to Iraq, acknowledging that such a move would require U.N. approval. But the sources confirmed that an Iraqi maintenance team came to Jordan last month and looked at the planes. Iraqi engineers have over the years checked the planes. The sources said the engines of the Boeings required a major overhaul at a cost of around $14 million to make them airworthy. They said Jordan did not have the required facilities to carry out the work. Jordanian officials said last month Jordan was ready to help Iraq rehabilitate the aircraft but gave no details. Civilian air traffic through Baghdad was halted after sanctions were imposed on Iraq days after the Kuwait invasion. Several Arab and foreign countries sent humanitarian flights to Baghdad this year and Iraq resumed regular domestic flights on November 5. _______________________________________________________ Iraq Moves to Take Back Control of Oil Revenue. By Wall Street Journal staff reporters Neil King Jr. in Washington, Bhushan Bahree in Paris and Alexei Barrionuevo in Houston. After whittling away at Iraq's diplomatic isolation, Saddam Hussein is now going after the biggest prize of all: control of the oil revenue he lost in the Gulf War. In his latest gambit, on Friday the Iraqi leader cut off oil exports until buyers agree to pay his treasury a 50-cent-a-barrel surcharge, bypassing the United Nations-administered oil-for-food program. While Iraq probably won't win this round outright, most experts expect Baghdad to emerge with control over another chunk of its oil revenue and with the international-sanctions regime in further disarray. Iraq Oil Minister Amer Mohammed Rasheed said yesterday at a news conference in Baghdad that buyers were free to pick up previously contracted oil from Iraq. However, Mr. Rasheed didn't clarify whether the buyers would be obliged to pay the surcharge. The UN authority enabling Iraq to export oil expires tomorrow. This authority is subject to renewal every six months, while the price Iraq is allowed to charge is determined every month. The international oil markets were unfazed by Iraq's oil cutoff, as prices dropped more than 5% to about $32 a barrel. Buyers had already counted on a brief loss of Iraq's supply. Analysts warned, though, that prices could begin to rise if the fight drags on past the end of this week. For the moment, oil markets are concerned about too much rather than too little crude because of an early ramping up of production by Saudi Arabia and the expected release of strategic stocks held by the U.S. and other members of the International Energy Agency, notably Germany and Japan. Until the Iraqi cutoff, many major exporters were looking to reduce output early next year. But if additional supplies are needed, Europe and the U.S., along with members of the Organization of Petroleum Exporting Countries, are all poised to put more oil on the market. In what could be a further escalation, the Iraqi government said over the weekend that it would boycott companies that sold Iraqi crude oil to "any country ... at war with Iraq or any other Arab country." Iraq makes frequent threats, and there is no way to know whether this one is serious. Iraq has been the sixth-largest supplier of oil to the U.S. this year, shipping an average of 585,000 barrels a day. Iraq, the third-largest producer in OPEC after Saudi Arabia and Iran, normally exports about 2.3 million barrels a day, or just over 3% of the world market. The proceeds are held in a U.N. escrow account, now totaling over $11 billion, that is used to pay for food and medicine and repairs to Iraqi infrastructure, but not military purchases. Iraq has already made significant gains in recent months, breaking a longstanding embargo on air travel to Baghdad and repairing relations with many Arab and European countries. Even a partial victory in the surcharge fight could help Saddam fatten his treasury and harden his defiant image. Some diplomats at the U.N., for instance, predict that Iraq may manage to secure a portion of its oil sales - as much as $1.50 a barrel - to cover so-called local charges, such as salaries for oil workers and crude-transport costs. The U.N. now gives Iraq about half that much, and France is already proposing to meet the higher charge. Iraq also hopes to begin pumping between 150,000 and 250,000 barrels a day through a recently repaired pipeline to Syria. U.S. officials, who insist that oil isn't yet flowing through the pipe, concede that Iraq has probably diverted a large amount of oil in recent weeks simply to fill it up in anticipation of pumping. American and British diplomats are pressuring the Syrian government to ensure U.N. control of the revenue, but the potential for sanctions-breaking there is considerable. The biggest importing countries and major OPEC members have been preparing for another Iraqi showdown for weeks. Even as Iraq was winning a squabble over changing its oil accounts to euros from dollars in October, the IEA's members - the industrial nations of the West that are huge consumers of petroleum - were meeting in Paris to put in place safeguards against an Iraqi cutoff. "The U.S. is prepared to draw a line in the sand and has the support of its allies this time," said Lawrence Goldstein, president of the Petroleum Industry Research Foundation, based in New York. "They will not allow Saddam to blackmail the world." When Iraq stopped loading tankers late Thursday, the IEA, the U.S. and its allies reaffirmed plans to bring more oil onto markets, if necessary. The Clinton administration says it is prepared to dip again into the nation's strategic oil reserves, though the timing of such a move hasn't been decided. Physical shortages won't begin to bite for at least three weeks. Oil is constantly flowing in pipelines, and ships are already on the water. Oil from the Persian Gulf takes about six weeks to get to the U.S. and four weeks to land in Europe. A long Iraqi cutoff, though, would deal a sharp blow to U.S. refiners. About 70% of Iraqi imports to the U.S. end up with Gulf Coast refiners, but 21% now goes to the West Coast, where Iraqi crude has quietly become the top foreign source of oil during the past two years, according to the Department of Energy's Energy Information Administration. Iraqi crude has become critical there to replacing crude oil from Alaska's North Slope, where production has been declining for several years. Prominent buyers of Iraqi crude include Chevron Corp., Exxon Mobil Corp. and Coastal Corp. _____________________________________________________ Iraq to open embassies in four CIS countries. KUWAIT, December 3 (Itar-Tass) - Iraq will soon open embassies in four countries of the CIS, namely Belarus, Ukraine, Kazakhstan and Azerbaijan, Iraqi Foreign Minister Mohammed Said al-Sahhaf said Sunday. Observers believe that in this way Baghdad wants to smooth the negative consequences of the international economic blockade introduced eleven years ago. At present Iraqi diplomatic missions are functioning in 62 countries. _______________________________________________________ Iraq minister explains ban on oil sale to "enemies". Dubai (Platt's)-3Dec2000/641 am EST/1141 GMT Iraqi Trade Minister Mohammed Mahdi Saleh said Sunday that any company selling Iraqi crude oil to countries considered enemies of Iraq or any other Arab country would forfeit future rights to Iraqi oil and he named the US among nations considered hostile. Saleh was elaborating on an Iraqi cabinet announcement Saturday that authorised the Iraqi president to impose sanctions against any firm or country selling Iraqi crude oil to hostile nations. "This country (US) has no intention of changing its stand towards Iraq, the Arab nation or the Palestinians...America is an enemy of the Arab people and their interests and of the Palestinian people and their rights, and so companies which supplied the US with Iraqi oil cannot be allowed to do so any more," Saleh said. _____________________________________________________ French planes bring politicians to Iraq - report. Dubai (Platt's)-3Dec2000/148 am EST/648 GMT A French plane carrying more than 100 political, parliamentary, trade union, intellectual and media figures arrived in Baghdad Saturday, Iraqi radio reported. The figures include European Parliament members from France, Italy, the Netherlands and Belgium, as well as representatives of various French political parties, headed by former French Foreign Minister Claude Cheysson, said the report, monitored by the British Broadcasting Corporation. A second French plane later landed at Saddam International Airport carrying more than 80 French personalities, Iraqi television, also monitored by the BBC, reported. It said the French delegation said the aim of its visit was to "express solidarity with the Iraqi people and to challenge the so-called no-fly zones imposed illegally on Iraq." ______________________________________________________ Can Saddam triumph with crude tactics? Oil rich Iraq is threatening to turn off ... By Anton La Guardia. News - International - Can Saddam triumph with crude tactics? Oil rich Iraq is threatening to turn off the taps in an effort to bring UN sanctions to an end. Anton La Guardia reports. IF yesterday's events were anything to go by, Saddam Hussein is no doubt preparing to treat himself to a celebratory shot of his favourite whisky to mark next month's US presidential inauguration. The Iraqi leader has successfully seen out George Bush and now Bill Clinton is heading into retirement while he remains firmly in power, more confident with every passing day. Yesterday, in the latest challenge to the western-sponsored international sanctions, Royal Jordanian Airlines staged the first "commercial" flight to Baghdad, with 19 passengers paying about £200 each for the five-hour round trip. More ominously, Saddam threatened to play what is potentially his most dangerous card. Turkish officials said he had turned off the taps of the oil pipeline to Turkey, seeking to press home his demand that international oil companies should make part of the payment for oil directly to Iraq rather than to the United Nations. With America paralysed by the legal wrangling between Al Gore and George W Bush, it was only to be expected that Saddam would try to wield his oil weapon: oil prices are at record highs and any disruption to supplies could send prices soaring and cause renewed protests of the kind that crippled Europe in September and October. Saddam does not need to move his troops to threaten western interests. All he has to do is to stop the oil flowing. Only a few years ago the world desperately tried to limit Iraq's oil exports. Today the greatest fear of the industrialised world is that Iraq, with the second highest oil reserves and producing about three per cent of global output, will stop exporting crude. The United States moved quickly to try to defuse the threat. It said Saudi Arabia and other countries would make up any shortfall in Iraqi oil, while the US would release crude held in its strategic oil reserve. The assurance helped to keep crude prices stable yesterday. After rising slightly, Brent crude fell $1.73 to close at $30.15 in London last night. The day's events were a potent sign of the threat posed by the Iraqi leader. He was defeated in Kuwait, endured 10 years of economic sanctions, lost control of the skies in the north and south of the country, and is repeatedly being bombed by American and British aircraft for defying international weapons inspectors. And yet still he is laughing at the West. Iraq is demanding that clients pay 50 cents per barrel directly to Baghdad, instead of to the United Nations account used to administer the international oil-for-food programme. This would give Baghdad an invaluable source of cash outside UN supervision. The UN sanctions committee told oil companies that they could load Iraqi crude on to tankers but should not make any payment until a "pricing mechanism" had been agreed. Confused, many oil companies decided of their own accord not to load Iraqi oil. Those who tried were apparently told by Baghdad that no crude was available. "The market thinks Saddam is bluffing," John Kilduff, an oil analyst, said. "But if this becomes a persistent problem then prices will react. This is a market that needs every last barrel of oil and we think it would be difficult for Saudi Arabia to fill the gap." Buoyed by the flow of petrodollars, both from the UN oil-for-food programme and from oil smuggled out through neighbouring countries, Saddam is back to his old bullying self. He has rattled his sabre at Kuwait, hurled insults at Saudi Arabia and ostentatiously "mobilised" volunteers to fight Israel. The United Nations Security Council is divided and Arab countries are upgrading their diplomatic ties with the former pariah state while French and Russian businessmen are lining up for contracts. The dam of international sanctions is leaking badly with almost daily challenges to the air embargo. During the transition period after the 1992 American elections, Saddam raised military tensions by "illuminating" Allied aircraft with his air defence radars, provoking repeated bombing attacks. Once Mr Clinton was sworn in, Baghdad made peace overtures to the new administration saying: "Iraq is not an enemy of America and does not want to be." Now Saddam is again testing Washington's resolve, trying to exploit America's distraction to break the international fetters. The Foreign Office has been fighting a rearguard action. It has leaked details of Iraq's efforts to develop weapons of mass destruction and stories of human rights atrocities. It has also told of the diversion of funds to government officials, releasing a satellite picture of a vast resort for the regime's cronies known as "Saddam City". But this propaganda offensive only serves to highlight the difficulty the West faces in trying to exert real pressure on Saddam However much the Foreign Office accuses Iraq of "playing politics" with the suffering of ordinary Iraqis, the UN sanctions are being increasingly called into question. Washington and London say that Iraq could have sanctions lifted within months if it would only allow a new weapons inspection team to return to Baghdad. Asked this week whether Baghdad would re-admit the monitors, Tariq Aziz, the Deputy Prime Minister, replied bluntly: "No". Economic sanctions, far from punishing Saddam, are becoming an Iraqi tool to isolate the United States and Britain, especially in the Arab world. Tellingly, the West never imposed the same kind of blanket sanctions which hit ordinary people against Slobodan Milosevic. The trouble with the Iraqi situation is that America and Britain have become prisoners of the sanctions policy. After a decade of embargo it will be impossible to lift it without giving Saddam an overwhelming political victory. tel: +44 (0)20 7403 5200 fax: +44 (0)20 7403 3823 email: [EMAIL PROTECTED] web: www.mariamappeal.com
