Chances Termed 'Pretty Slim' for Iraq Oil Export Prospects
Baghdad's grudging acceptance Saturday of a punitive United Nations cease-fire resolution theoretically opens the way for Iraq to resume oil exports, its economic lifeline. But before the U.N. embargo is lifted, Iraq must destroy its chemical and biological weapons and long-range missiles and agree to pay reparations to Kuwait.
The Middle East Economic Survey, a respected oil industry newsletter published in Nicosia, said Kuwait proposed 25 percent of Iraq's oil income be put into a fund to make the payments.
Whether or not the final agreed percentage is that high, the stringent conditions of the resolution will ensure that Iraq's economic power will be vastly reduced for some considerable time along with its military might.
Before Saddam Hussein's army invaded Kuwait, Iraq was producing some 3.4 million barrels of oil a day, most of it for export through pipelines across Saudi Arabia to the Red Sea and through Turkey to the Mediterranean. The pipelines were shut under the U.N. embargo.
The Middle East Economic Survey said that there may be as much as 40 million barrels of oil in storage at export terminals and in the pipelines from before the U.N. embargo.
But the newsletter noted that even resuming exports on such a limited scale can only begin once the U. …