Iraqi oil exports continue steep decline under UN humanitarian oil-for-food scheme

Iraqi oil exports continue steep decline under UN humanitarian oil-for-food scheme

Iraqi oil exports trickled to a recent low of 2.6 million barrels over the past week, according to the United Nations office which runs the oil-for-food programme, which allows Baghdad to use a portion of its crude revenues to purchase humanitarian relief.

UN officials blamed the slowdown on several factors, including steps taken in response to reported illegal kickbacks being paid by contractors to the Iraqi Government. Those measures involve the practice of "retroactive pricing," whereby the Security Council's sanctions committee on Iraq sets prices for the country's petroleum only at the end of every month in an effort to foster fair market value and discourage illegal surcharges.

Another factor reportedly contributing to the slowdown in exports is the unreliability of oil exports from Iraq, which in the past has unilaterally suspended its sales for various periods of time. The current uncertainty surrounding the situation with regard to Iraq is also affecting the situation, UN officials said.

With sales grinding, Iraq earned only €70 million (euros) or $69 million, the Office of the Iraq Programme reported. The low intake compounds recent cash-flow problems being experienced by the oil-for-food programme, which faces a cumulative revenue shortfall that has made it impossible to fund over 1,200 approved contracts for goods worth some $2.21 billion.