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United Nations

Iraq Threatens to Cut Oil Exports Over Food and Spare Parts Embargo

Strategic Insights

— 1 min read

Iraq is considering cutting its petroleum exports under the "oil for food" agreement due to delays in shipments of essential commodities, including food and medical supplies. The move comes as Iraq's oil dues of $8.3 billion remain deposited in a New York bank account, while the country receives only a fraction of the goods it has paid for. The Iraqi government is also warning that it will reduce daily oil production unless the United States lifts the embargo on exports of spare parts required for the country's petroleum industry.

Key Takeaways:

  • Iraq is considering cutting its petroleum exports under the "oil for food" agreement due to delays in shipments of food, drugs, and other essential commodities.
  • Iraq has deposited $8.3 billion in oil dues in a special bank account in New York, but has not received merchandise or food products in return.
  • Since the inception of the scheme in December 1996, Iraq has allowed a total of $22 billion to be transferred, while receiving only $6 billion worth of food products.
  • Under the scheme, Iraq pays 30% of its petroleum revenues into a special indemnification fund to compensate victims of the Gulf War.
  • Iraqi Minister of Petroleum Amar Muhammad Rashid warns that Iraq will cut daily oil production by 250,000 barrels unless the United States lifts the embargo on exports of spare parts.
  • UN sources report that Iraq reduced its petroleum output from 1.86 million to 1.4 million barrels per day towards the end of January.

Statistics:

  • $8.3 billion: Iraq's oil dues deposited in a special bank account in New York.
  • $22 billion: Total amount transferred under the "oil for food" scheme since its inception in December 1996.
  • $6 billion: Worth of food products received by Iraq in return for oil dues.
  • 30%: Percentage of petroleum revenues paid into a special indemnification fund to compensate victims of the Gulf War.
  • 250,000 barrels: Reduction in daily oil production threatened by Iraq unless the United States lifts the embargo on exports of spare parts.
  • 1.4 million barrels per day: Current level of petroleum output, down from 1.86 million barrels per day at the end of January.

Sources:

  • Al-Quds newspaper
  • Statement by Iraqi Foreign Minister Muhammad Sallah to UN Secretary-General Kofi Anan
  • UNCTAD Conference in Bangkok, February 2000

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