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Russia criticizes U.N. oil pricing policy for Iraq
by The Associated Press
Russia said that the U.N. oil-for-food program for Iraq is on “the verge of breaking down” and accused the United States and Great Britain June 18 of hindering an effective oil pricing policy.
“Recently a critical situation has emerged in carrying out the U.N.’s humanitarian program of oil for food for Iraq in connection with the unprecedented lowering of the level of oil exports from Iraq,” the Russian Foreign Ministry said in a statement.
The oil-for-food program was initiated in 1996 to help improve the lives of civilians under sanctions imposed on Iraq for the 1990 invasion of Kuwait. It permits Iraq to sell unlimited amounts of oil to buy food and medicine.
In October, however, the United States and Britain won approval to set the price of Iraqi oil retroactively at the end of the month to prevent Iraq from taking advantage of market fluctuations to impose an illegal surcharge. Until then, the price was set at the beginning of the month, which allowed Iraq to add and pocket the surcharge.
The Foreign Ministry said the current situation had led to “growing concerns, above all with the obvious negative consequences for carrying out the U.N. humanitarian programs for Iraq, which are on the verge of breaking down.” Iraq says contracting difficult It said the retroactive pricing policy makes it difficult for Iraq to conclude oil contracts. Iraq says traders do not want to buy oil without knowing the price and that the country has been was losing large sums of money.
“Moscow believes that it is necessary to put an end to the practice of retroactive pricing on Iraqi oil,” the Foreign Ministry said. It said it hoped the policy will be changed during U.N.-Iraq talks next month in Vienna.
Russia also complained that the interests of oil companies, including its own, were suffering as a result of the action by the United States and Great Britain.
Russian oil companies are actively participating in the reconstruction of Iraq’s oil infrastructure and stand to reap significant benefits should U.N. sanctions be completely lifted.
That cannot happen until U.N. inspectors are satisfied that Iraq has scrapped all weapons of mass destruction, but Iraq has not allowed inspectors into the country in more than three years.
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