By OGJ editors
WASHINGTON, DC, Dec. 5 -- The United Nations Security Council late Wednesday renewed the Iraq oil-for-aid program for 6 months. Because of US concerns, the council also agreed within a month to review a restricted goods list to ensure Iraqi President Saddam Hussein does not use funds from oil sales to build up a military war chest.
Last May the UN agreed to a "smart sanctions" plan designed to increase civilian goods to the Iraqi people by streamlining import controls (OGJ Online, May 14, 2002). Some goods, however, still must be approved separately because of fears they could be used in war.
Despite escalating hostilities between the US and Iraq, Baghdad is currently exporting about 1.7 million b/d of oil. Nevertheless, oil analysts expect that the international oil market can easily absorb a sudden loss in production provided any military conflict is contained and brief.
The US earlier sought a shorter 2-week extension of the humanitarian oil program because it wanted to add new items to the restricted goods list. It accepted the 180-day extension, provided that the UN revisit the issue of what goods should require special approval before being imported into Iraq.