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Iraq cuts oil in Israel protest

Iraq cuts oil in Israel protest


BAGHDAD, Iraq -- President Saddam Hussein has announced Iraq is cutting its oil exports for a month in protest at Israel's military offensive in the West Bank.

The halt in oil would include all exports through Turkey and the Persian Gulf port of Basra, including that for the United Nations oil-for-food programme, which limits Iraq's oil exports in exchange for food and medical supplies.

Most of Iraq's oil is indirectly exported to the United States and Europe.

In a nationally televised speech, Hussein said Iraq's top leaders had met earlier Monday and decided "in the name of the people of Iraq ... to stop exporting oil totally ... through the pipelines flowing to the Turkish ports and the south for 30 days" unless Israel withdrew earlier.

He said that if Israel had not withdrawn within that time, Iraq would consider what action to take.

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CNN's Jane Arraf reports on the Iraqi decision to halt oil exports for a month in protest of the Israeli military campaign in the West Bank (April 8)

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Iraq began making calls last week on Arabs to cut oil supplies as a way of pressuring the United States to force Israel to end its military incursions into Palestinian territory.

World financial markets have been concerned any increase in the cost of oil could derail a fragile global economic recovery, CNN's Todd Benjamin said.

An increase of one percent at the petrol pumps can slash consumer spending by $1 billion in the U.S. alone, analysts have predicted.

Brent Crude futures for May delivery rose $1.36 to $27.35 a barrel after the announcement before settling around $26.30 in midday London trading.

In New York, former U.S. senator George Mitchell said Iraqi's oil supply by itself is "not so great" and its loss from the market would not have "an adverse effect."

"But as you know, both Iran and Libya have already expressed support for such a move," he told CNN.

"The real key, of course as always in oil, is Saudi Arabia... If Saudi Arabia joins the effort, then I think there will be very severe repercussions throughout the Western world, including the United States economy."

Algeria's Energy and Mining Minster Chakib Khelil said oil cartel OPEC rejected the use of oil exports as a political weapon.

"OPEC, which includes non-Arab states, has officially rejected this idea," he told Reuters in the southern city of Marrakesh in the sidelines of an international energy

exhibition.

Khelil said the oil weapon had been used by Arab OPEC members in 1973, but that had backfired on them by slashing their revenues.

"OPEC has also non-Arab states to think of," he said. "What is very important now is that if the political crisis in the Middle East continues, we will witness a surge in crude

oil prices due to speculators."

At the United Nations in New York, a spokeswoman confirmed Iraq has stopped pumping oil at Ceyhan, a pipeline through Turkey.

There is "no clear picture yet" at Mina al-Bakr, the other U.N. sanctioned pipeline which lies further south in the Persian Gulf, the spokeswoman added. She said vessels were still loading at Mina, making it hard to tell if oil exports had been stopped.

But any oil boycott would be ineffective without Saudi Arabia and Kuwait, who have rejected Iraq's call to use oil as a weapon.

Hussein said in his speech: "The oppressive Zionist and American enemy has belittled the capabilities of the (Arab) nation.

The Iraqi leader said the Israeli move into Palestinian towns "took place according to a joint coordination between the Zionist entity and the American administration, whose aim is... to break the Arab and Palestinians will and force them to surrender with humiliation to the Zionist-American alliance."

Hussein has portrayed himself as a champion of the Palestinian cause.

Iranian supreme leader Ayatollah Ali Khamenei on Friday called on Islamic countries to stop supplying oil for one month to countries with close relations with Israel. Libya announced Monday that it supported the call.

Many Gulf states depend on oil revenues for more than two-thirds of government income and cannot afford to stop sales.

The last time oil-producing Arab nations used oil as a political weapon was in 1973, when reduced exports caused a global energy crisis.

Since then, the world's wealthiest nations have created the International Energy Agency to provide a cushion against any similar disruption.

Based in Paris, the IEA can tap into four billion barrels of strategic oil reserves maintained by its member countries, equal to more than five years of Iraqi production, based on the IEA's estimate of Iraq's output in January.

In November 2000, Saudi Arabia led the adoption of a pledge by the Organization of Petroleum Exporting Countries and other major exporters that oil would not be used as a political weapon.

In New York, former U.S. senator George Mitchell said Iraqi's oil supply by itself is "not so great" and its loss from the market would not have "an adverse effect."

"But as you know, both Iran and Libya have already expressed support for such a move," he told CNN.

"The real key, of course as always in oil, is Saudi Arabia ... If, in fact, Saudi Arabia joins the effort, then I think there will be very severe repercussions throughout the Western world, including the United States economy."



 
 
 
 






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