To: Czechsinthemail who wrote (10333 ) 2/2/1998 12:00:00 PM From: Tulvio Durand Read Replies (2) | Respond to
Iraq's smuggling oil is old news. For example, NY Times reported in 1995 smuggling story below. More recently there was at least one post here, within the last month, saying that Iraq's smuggling has gotten so big that it is able to sell, by way of Iran, all the oil it can produce. You can look for it, or maybe someone can help find it (too many posts for me to look at; sorry). Finally, the sale of Iraqi oil to Jordan at about half the going rate (about $8/bl is what I recall) was reported about two weeks ago in the San Diego Union Tribune (but, I couldn't find it in their archives -- perhaps someone can help here with the source).
Tulvio
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Traders tell of Iraq's vast oil smuggling
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NEW YORK TIMES NEWS SERVICE
16-Feb-1995 Thursday
PARIS -- Iraq has set up a secret system over the past year to export
crude
oil and refined products to bypass the U.N. sanctions barring such
sales,
senior oil industry executives and traders said yesterday.
The executives said the illicit sales had generated $700 million to $800
million in revenue for the Iraqi economy, which is crippled by sanctions
imposed by the United Nations after Iraq's invasion of Kuwait in 1990.
The executives, some of whom are directly involved in the sales, said
Iraq
was relying on a growing network of oil traders motivated by the big
discounts given on their purchases. Traders said Iraq was selling the
oil
for as little as $8 a barrel, compared with a market price of about $14
a
barrel for Middle Eastern oil of that type.
Hundreds of trucks are carrying the oil through Kurdish territory in
Iraq's northern region into Turkey or to Iran, countries in which the
oil
can quickly be sold at a profit without being re-exported.
The advantage for the Iraqi Kurds or for Iran, normally adversaries of
the
Baghdad government, is financial profit, said the traders, whose
accounts
were confirmed by senior oil executives in France and Britain.
Baghdad allows Kurdish rebels in northern Iraq to collect a tax on each
truck passing through the region, with much of the revenue funneled to
Kurdish political leaders who have fought against the Iraqi army. And
the
Iranian government in Tehran has financial links to many of the
middlemen
who operate along Iran's long border with Iraq.
Dozens of small tankers are also sailing from the Iraqi port of Umm
Qasr,
south of Basra and near the Kuwait border, to the Persian Gulf area near
Dubai, where the oil is reloaded onto other tankers bound for markets in
the Mediterranean.
The profits realized by the traders far outweigh the danger of
occasional
interception by U.N. vessels, mostly U.S. warships, patrolling the
Persian
Gulf, the oil traders say.
"They are selling their oil at $8 to $10 per barrel," one oil trader
based
in London said. "That's a big discount, which explains why many of us
are
willing to take risks to move that oil."
By offering these discounts, Iraq has raised the total amount of oil it
exports through its secret routes to about 200,000 barrels a day,
bringing
in revenue of more than $700 million in the past year, the executives
said.
That is less than 6 percent of the $12.7 billion Iraq would earn if it
were
still exporting 2.5 million barrels a day, as it did before the gulf
war.
Nonetheless, the income is significant for a country that has little
other
source of revenue.
The oil smuggling network, largely managed by senior government
officials
related to President Saddam Hussein, including his son, Uday, and his
brother-in-law, Industry Minister Hussein Kamil, shows signs of
expanding
as operators on both sides of Iraq's borders improve their logistics.
Oil executives and the Iraqis say exports have expanded with the tacit
support of Turkey, Iran, Jordan and others in the region that believe
the
sanctions against Iraq have been in place too long and are costing them
too
much in lost trade.
Executives said dozens of international oil concerns, including
companies
from France, Italy, Russia, Britain, Spain and Canada, have held talks
with
Baghdad about producing and exporting Iraqi oil once sanctions are
lifted.
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Copyright Union-Tribune Publishing Co.
