Iraq Reportedly Sells Oil Products to Its Neighbors

Iraq is quietly exporting small quantities of refined oil products in defiance of the U.N. trade embargo, Mideast diplomats said Sunday.

They said Iraq is selling the products--mainly diesel fuel and kerosene--to Lebanon and Turkey to help pay for food in the face of the sanctions and frozen foreign assets.

The quantities involved are small, the diplomats said, but they help reduce Baghdad’s food import bill of $100 million a month.

The products appear to be coming from Iraq’s Daura, Beji and Basra refineries in central, northern and southern Iraq, after vigorous efforts to repair damage from the Gulf War, they said.

The diplomats said the oil is being exported in trucks via the 750-mile road into Jordan and then on to Lebanon through Syria, a member of the Western-Arab coalition that drove Iraq from Kuwait in February.

“Business is business, I suppose,” commented one diplomat familiar with the regional oil market.

Small quantities of the same kind of products are also being sent by road to Turkey, the diplomats said. Ankara turned off Baghdad’s overland oil pipeline and allowed Washington to use its territory to launch bombing raids on Iraq in the Gulf War.

Lebanese-registered tanker trucks had been routinely seen on the Baghdad-Amman highway, the diplomats said.

Iraq sends some crude oil to Jordan to pay off loans. Diplomats said they believe Iraq has also asked Turkey to allow it to secretly pump limited quantities of crude through its northern pipeline but that the Ankara government has refused.

Diplomats noted that an Iraqi oil official was quoted last week as saying that Iraq’s refining capacity has risen to about 540,000 barrels per day, 100,000 above domestic consumption needs.