Iraq faces considerable barriers before it can resume exporting oil to the international market.
Stephen Brannon and Thomas Mattair detailed those snags in a report for the Middle East Policy Council, Washington, D.C.
They pointed out that the United Nations' economic sanctions against Iraq were designed to prevent the country from amassing a war machine formidable enough to again threaten regional stability.
IMPROVED PERFORMANCE?
"However," Brannon and Mattair said, "the human rights record of the Baghdad regime and distrust of its future intentions have prompted some to insist on maintaining the sanctions until dramatic improvements are evident.
"The worldwide petroleum glut, as well as the humanitarian and economic situation within Iraq, are additional factors that may affect the timing and extent of Iraq's return to the oil market."
After Iraq invaded Kuwait, the U.N. banned international trade with Iraq, except for humanitarian goods.
The ban is to stay in force until Iraq destroys or removes chemical and biological weapons and ballistic missiles, drops its nuclear weapons program, and submits to monitoring.
"After repeated cases of brinkmanship, it appears substantial progress has been made," the report said. "On July 19, 1993, Baghdad agreed to the principle of long term weapons monitoring and allowed cameras to be installed at its principal missile testing sites. On Oct. 8, Iraq supplied the U.N. lists of weapons suppliers, while on Nov. 27 it agreed to accept long term monitoring of key industrial facilities."
Nevertheless, Brannon and Mattair said, Iraq's veracity and commitment remain questionable, and some observers think Iraq remains intent on acquiring nuclear weapons and does not accept the new boundary with Kuwait.
"On Dec. 18 the Clinton administration outlined its desire for additional criteria for lifting the sanctions against Iraq. The U.S. now insists Baghdad recognize the legitimacy of Kuwait's borders, end persecution of dissident Kurds and Shi'a, and prove its compliance with 6-12 months' monitoring of its industrial programs by the U.N. before the lifting of sanctions can be considered. The American position is supported by Britain, France, and Russia."
The U.N. has authorized Iraq to sell $1.6 billion worth of oil during 6 months if the money is placed in escrow for food and medicine, U.N. inspections and missions in Iraq, and reparations for expelled foreign workers. Iraq has rejected that.
FROZEN ASSETS
Various countries have frozen $4-5 billion of Iraqi assets and transferred about $800 million to the U.N. for its operations in Iraq. The U.S. has frozen about $1.62 billion, but Iraq owes $1.9 billion to U.S. interests.
The report said prospects of even limited Iraqi oil exports have periodically, sent shock waves through oil markets because exporting countries have been struggling to maintain their market share.
"Some western oil companies are positioning themselves for the eventual return of Iraqi oil to world markets," it said. Baghdad has signed letters of intent with France's Elf Aquitaine and Italy's Agip for oil exploration and production once sanctions are lifted.
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