Iraqi oil exports halted

Prices rise quickly, but analysts say supply OK

SAMEER YACOUB, THE ASSOCIATED PRESS

Originally published Tuesday, April 9, 2002

BAGHDAD, Iraq -- Saddam Hussein said Monday that he was cutting Iraq's oil exports for 30 days or until Israel withdraws from Palestinian territories, an announcement that triggered an immediate increase in world oil prices.

However, analysts said an Iraqi boycott would not affect world oil supplies because most major members of the Organization of the Petroleum Exporting Countries have not followed Iraq's lead. An OPEC source said the group would intervene if necessary to offset the shortfall in Iraqi shipments.

Oil ministers were conferring about what action to take once they learn details about the boycott, the source said.

OPEC has not received formal notification yet from Iraq about its embargo, and it was unclear whether Iraq planned to halt all of its shipments, the anonymous source said from OPEC headquarters in Vienna, Austria.

Gulsum Korkmaz, spokeswoman for the Turkish state-run pipeline company BOTAS, which transport's Iraq's oil, confirmed that Iraq had stopped exporting.

The United States and Europe are the major buyers of Iraqi oil. OPEC says Iraq has a maximum daily production capacity of 2.3 million barrels of crude oil.

White House take

White House spokesman Ari Fleischer said Iraq's boycott is "another sign that Saddam Hussein is willing to starve his own people. It's a reminder about the need for America to have an energy policy that is independent of such threats."

In London, May contracts of North Sea Brent crude shot up on news of Iraq's embargo by $1.44 to $27.43 a barrel on the International Petroleum Exchange. They settled back somewhat to $26.98, up 99 cents from Friday's close.

On the New York Mercantile Exchange, contracts of crude for May delivery jumped to $27.20 before easing back to $26.88 a barrel, up 67 cents from Friday.

Saddam said Iraq's top leaders met Monday and decided "in the name of the people of Iraq ... to stop exporting oil totally as of this afternoon."

He said that if Israel had not withdrawn within that 30 days, Iraq would consider what action to take.

At the pump

Average price per gallon for regular gasoline in South Sound:

Monday: $1.38

One month ago: $1.16

One year ago: $1.50

Source: AAA Fuel Gauge Report

The Olympian Copyright 2002

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