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Iraqi oil exports under UN programme stop

Traders contacted in London said companies were not buying Iraqi oil because the contracts could no longer be financed through the UN-supervised humanitarian programme.

A shipping source in the region also said that lifting of Iraqi oil already stopped from Iraq's terminal of Mina al-Bakr on the Gulf last weekend. "Insurance doesn't cover war," he said.

Mina al-Bakr and the Turkish port of Ceyhan are the two points of exports of Iraqi oil under the humanitarian programme launched in 1996 to ease the impact on Iraq's civilians of the embargo slapped on Iraq in 1990 for invading Kuwait.

"After the last tanker loaded and left Mina al-Bakr, two others were supposed to lift this week but insurance companies decided they won't have the time to load and sail out in time before the military offensive start so they cancelled them," the shipping source said.

"It's continuing for the moment at Ceyhan, because of past contracts and Iraqi oil already stored there, but this is also expected to stop the moment the offensive starts," he added.

Traders said however that Iraq's exports by road to Jordan and through a pipeline to Syria, which are not supervised by the United Nations, were apparently continuing.

An oil expert said the United States would be the first to suffer from the halt in Iraqi exports because it is the biggest buyer, taking about two-thirds of Iraq's sales last month.

However, the market is well supplied by other sources, he said.

Iraqi Trade Minister Mohammad Mahdi Saleh said on Monday that Baghdad has not yet decided to halt oil production, although UN Secretary General Kofi Annan said the humanitarian programme had to be suspended because the UN staff tasked to oversee it had to pull out of the country because of the looming US-led war.

The last UN staff left in Iraq were being pulled out yesterday.