DUBAI, April 25: The UAE is eagerly waiting the new Iraqi oil policy but showing confidence that ‘flow of Iraqi oil to the markets will have limited impact on Arab economies.’

“No doubt, Iraq has huge reserves of oil but until now we do not know the policies that will control the reserves,” said Sheikh Hamdan bin Rashid Al Maktoum, UAE Minister of Finance during the annual meeting of Arab Trade and Finance Ministers while reacting on possible impact of the US control of Iraqi oil.

The UAE Finance Minister believes the emirate’s economy could absorb any possible effect resulting from the Iraqi flow of oil to world markets.

“The US occupation and increased oil supplies to the markets will affect economies of oil producing countries. But the government and people of Iraq will not allow the oil markets to be hurt,” said Sheikh Hamdan.

Meanwhile, there is an anxiety over how and who will formulate the future Iraqi oil policy and analysts and experts think the US will have no legal rights to abrogate existing oil contracts in Iraq and only a future Iraqi government will have powers to do so.

“There is no legal way the US can touch Iraqi oil and the only way is through a legal Iraqi Government in place,” Dubai’s Gulf News quoted Saadallah Al Fathi, a consultant at the Iraqi Oil Ministry, as saying.

There are more than 10 international companies who have contracts to explore and produce oil in Iraq, China and Russia having the biggest share.

Gulf News has quoted another Middle East petroleum expert as saying: “The oil industry is waiting and watching the US moves as it is a key concern. It is known that Russia and China are big players in Iraq’s oil sector and there are concerns as to what will happen.”

Iraq’s southern oilfields have started producing 50,000 bpd, aiming to producing 80,000 bpd by mid May. Before the war Iraq was producing 1.7 million bpd from its giant southern oil fields and 800,000 bpd from its reserves in the northern areas.

The other oil producing Arab countries, who depend on oil as a major source of their revenues, fear the resumption of full Iraqi oil supply to world markets will affect their income, forcing them to revise their budgets.