October 6, 2002	Sunday	Rajab 28, 1423

NICOSIA, Oct 5: The United States and Britain have refused to return to a simple pricing system for Iraqi oil through the United Nations despite Baghdad lifting a surcharge, the Middle East Economic Survey (MEES) reports.

The US and UK have moved the goal posts once more, the weekly says in its Monday edition.

In essence Washington and London want to eliminate name-plate and small trading firms from buying Iraqi oil and re-selling it to third parties and oblige Baghdad to sell to US and UK firms directly, something that Iraq has refused to do, the Cyprus-based newsletter says.

Iraq’s State Oil Marketing Organisation in September stopped levying an illegal surcharge it insisted on for about two years.

SOMO set the premium in July at 15 US cents a barrel for exports to the United States and 25 cents for Europe.

Last year, Britain and the United States forced a tougher retroactive pricing policy on the Security Council’s sanctions committee in response to the surcharges.

The price, which was previously determined at the start of each month by the oil overseers in consultation with the Iraqi oil ministry, is now set retroactively by the committee.

London and Washington told the sanctions committee on October 2, they insist on the strict retroactive pricing system for Iraqi crude exports should continue, MEES says.

As the dispute raged at the world body over the pricing system, Iraq’s oil exports plunged.

However, exports rose with the end of the surcharge, which allowed major national European companies to resume lifting after a long absence, the industry specialist notes.

The volume of oil exported by Iraq under UN supervision fell from a four-month high of 13.3 million barrels to 7.9 barrels last week, the office administering the UN oil-for-food programme said.

The total, equivalent to 1.1 million barrels a day, was barely half Iraq’s estimated export potential of about 2.1 million barrels a day.

With Iraqi oil priced at an average of $26.55 a barrel, revenue last week was estimated at $210 million, compared with 344 million the previous week.

Buyers of Iraqi crude have so far lifted only 119.3 million barrels of oil in this phase, for revenue estimated at 2.93 billion dollars. The phase runs from May 30, to November 25. —AFP