The United States today threw its weight behind a British proposal to tighten procedures for pricing Iraqi oil, raising prospects for a new clash with Baghdad at the United Nations.
Iraq and Russia, its chief ally on the U.N. Security Council, oppose any effort to impose changes in a system that diplomats allege has allowed Baghdad to rake in an illegal 10- to 15-cent surcharge on every barrel of oil it sells.
"In principle, we don't like any change in the existing scheme," said Gennady Gatilov, Russia's deputy representative to the United Nations. "Oil exporters will experience difficulties in signing and fulfilling contracts."
Under the United Nations' "oil for food" program, Iraq is allowed to export as much oil as it desires. But the revenue must go into a U.N. account and be spent under U.N. supervision, primarily to purchase humanitarian supplies.
According to diplomats, Iraq has tried to set artificially low prices on its oil and to favor buyers who are willing to pay secret surcharges into offshore bank accounts, circumventing the United Nations' control over Iraqi oil revenue. U.S. and British officials say they suspect the illicit proceeds have been used to purchase weapons and luxury items for Iraq's ruling elite.
At present, Iraq and the United Nations jointly set oil prices every 30 days. But Baghdad also has been permitted to negotiate reductions in its prices whenever the world price for oil drops, ensuring that traders can earn enough of a profit to pay kickbacks.
Britain proposed last week that Iraq and the United Nations set prices every 10 days, making it more difficult for Baghdad to exploit fluctuations in the market. Britain also used its veto power on the U.N. committee that monitors Iraqi oil sales to prevent Iraq from setting new prices.
The United States initially balked at supporting its most important ally, citing concerns that the British plan would disrupt the global oil trade. But the Bush administration assured Britain today that it would back a compromise plan to set prices for 15-day periods.
The allies are expected to inform the Security Council on Monday that they will test the new policy beginning with September prices. "We have agreed to allow current August prices to be extended to the end of this month in order to avoid an immediate or short-term disruption," said a British official. "But henceforth we will insist on prices being submitted every 15 days."
Neftegaz.ru
