Iraq Watch Specials: The Truth About the UN "Oil-for-Food" Scam December 12, 2004 >From Peace No War Network URL: _www.PeaceNoWar.net_ (http://www.peacenowar.net/) As I wrote on 1999 on Covert Action Quarterly magazine about the *real* reasons U.S. daily bombing Iraq is to boost their weapons sales in the U.S. and around the World (_http://www.actionla.org/Iraq/IraqReport/CAQ.htm_ (http://www.actionla.org/Iraq/IraqReport/CAQ.htm) ) Similarly, the *real* reason behind the U.N "Oil-For-Food program" was U.S. to steal Iraq's oil for lower-then market price. I wrote a detail investigative article about this on the Spring 2000 issue of Covert Action Quarterly Magazine (see under). Currently, the U.S. is intend to use this old U.S.-manufactured scandal to overthrown UN Secretary-General Kofi Annan, and to achieve the control of United Nations. It's true that without a huge U.N. bureaucracy to help U.S. to achieve his scheme, the U.S. oil companies will not able to quietly ripped-off 40% of Iraq oil under the program and block almost all vital medical supplies thought the 90's that result in 3/4 millions of Iraqi children death (a infamous quote by Albright on mid-90's said "it was worth it." for so many Iraqi Children death because of sanctions). Furthermore, U.S. is using Iraqi oil to play it oil-geo-political covert action scheme of global dominance game, from Palestine, Cuba, Venezuela (_http://www.actionla.org/Iraq/IraqReport/CL.htm_ (http://www.actionla.org/Iraq/IraqReport/CL.htm) ). Lee Siu Hin Peace No war Network ====================================================== The Iraq-Russia-US Oil Pipeline How the US Has Been Using the UN âOil-for-Foodâ Program to Steal Iraqâs Oil By: Lee Siu Hin March, 2000 On February 3rd at Persian Gulf near Oman, a team of US Navy SEAL laid a Russian oil tanker on commando-style, they accuse Volga-Neft 147 is smuggling Iraqi oil. US Secretary of Defense William Cohen says they donât believe the Russian government was involved in Iraq oil smuggle, and US official says the administration was merely enforcing the embargo against Iraq. However, what Cohen and the administrations didnât said: For the past three years US had became the biggest hidden Iraq oil buyerâwith the help of Russia. The United States, together with Britain, France and Russia, has manufactured one of the biggest oil scheme in history: the theft of billions of dollars of below-market price petroleum from Iraq every year under the United Nationsâ âOil-for-Foodâ program. Because of the sanctions, Iraq has forced to sell its oil far cheaper then the international oil market price (so-called discount prices); up to $5 per barrel below any other Gulf country's oil. This is the main reason for 1998's 60% oil price collapse--the cheapest oil since the 70's 'oil crisis.' Although international crude oil price had been sky-rocked to $30 a barrel early this year, it still doesnât change the facts that American oil companies are still buying âdiscountedâ price oil from Iraqâup to 40 percent of its production, quietly end up in US refinery, not directly from the UN programs, but indirectly from Russia. Iraq since the beginning of the UN program had strictly refusing to sell its oil to US, UK and Japanese companies (with the exceptions of US Coastal and Phoenix oil companies). âWould you help a person who commits a crime against your people [by selling oil to them]?â Iraqi oil minister Amer Rashid asks. âThis is an ethnical, not political issue.â (10) The Iraq-Russia-US oil connections are nothing new, since beginning of this Century, the equation of the games in the Middle East has been always the same âoil. This is also one of the main reasons this time in Iraq: the US wants to maintain its UN sanctions against Iraq before and beyond, because it greatly benefits US oil companies (9). âOil-for-Scamâ Logically, if Albright hates Saddam so much and accusing him of building new weapons everyday, why doesn't she just simply prevent Iraq from selling oil, so Saddam wonât have any money for developing new guns? Thatâs the Catch 22 Uncle Sam doesnât want you to know about: on the one hand the United States maintains its nearly 10-year old campaigns of continuous bombing and starvation against Iraq, while on the other hand it is covertly using the UN "Oil-for-Food" program to steal billions of dollars in below-market price oil from Iraq every year, according to the United Nations, and government records. For the past three years, every month dozen Iraqi oil shipments quiretly arrived to different oil refrinly in Texas, New Jersey and California, almost no information had been available to the public. It is highly puzzled that the United Nations, State Department, Pentagon and US Customs had completely silent (even spin controlling) the facts of Iraq-Russia-US oil pipeline, despite the facts that last year that Chevron, Exxon-Mobil, Valero and Clark imported 60% of total US-Iraq oil importâor one-fourth of total Iraq oil export. For countery, Coastal Corp, the only US oil company allow by the Iraq to buy its oil, count only 3% of all US-Iraq oil import last year. The US openly buys very little oil from Iraq under the program; officially, only Houston-based Coastal Corp is importing Iraqi oil under the program, however behind the closed doors, US oil companies buying Iraqi crude through Russ ian intermediaries, so-called âThird-Party Oil.â Russian companies like Lukoil buy Iraqi oil under the UN program, then 'resell' it to US companies. As a result, nearly 40 percent of Iraq's oil exports end up in US refineries, like Chevron. With the price averaging $2 to $5 cheaper then any other Gulf oil producers, US oil companies make billions of dollars of profit from the difference every year. And this is the main cause of the worldwide 60 percent oil price drop in 1998--the cheapest oil since the 70's 'oil crisis.' For the past few years the United States has constantly sabotaged and blocked any possibility for the UN to lift the embargo, because sanctions against Iraq greatly benefit American oil companies. The âOil-for-Foodâ program was created to allow Iraq to sell oil and use the profit to buy food and medicine for its people. Under UN Resolution 986, since 1997 Iraq has been allowed to sell a specific dollar amount of crude oil to buy food and medicine. The Iraqis can only sell so many dollars' worth of oil, limited by the UN for each phase. For the first three six month phases, the Security Council set a ceiling of two billion dollars on oil exports in each phase. From phase IV onwards the ceiling was lifted to $5.2 billion. Although the UN specified how much Iraq can sell every six months (3), nowhere does the program specify the quantitative amount of oil Iraq could sell at what price, and strangely enough, the UN has no authority over the oil price. Itâs up to the international oil buyers and SOMOâthe Iraqi state oil company--to decide the selling price by haggling. With a gun to its head, Iraq has no choice but to let international oil buyers decide the price. Since phase I of the UN program, Iraq selling its oil with âdiscountâ price to the international buyers. Although it usually discounts average 10 to 15 cents per barrel, the complexity of the UN oil program, UN paper works and approval from 661 committee could delay the shipments for up to few months. With this wide-time Gap, and many other back-door deals, at the end Iraqi oil can up to $5.00 cheaper than any other Gulf stateâs oil producers. Two million barrels of Iraqi oil every day works out to $10 million dollars of extra profit/savings per day for the companies buying Iraq's oil. (Incidentally, the five biggest oil importers just happen to be the five permanent members of the UN Security Council!) But there is another way that such companies as US Chevron, British Petroleum, Russian Luke Oil or French Elf benefit from the oil for food program. Because of the embargo, Iraq's oil is not affected by normal market rules. And its export is in addition to the current demand and supply. This drives the global oil price down for the benefit of the buyers--as far down as $50 million per day. Ironically, the importing of Iraqi oil by US companies hasnât helped ease the tensions in the region; for whenever US-Iraqi tension boils over, US oil companies are likely to buy more Iraqi oil. For example: in December of 1998, the month when the US-UK began operation âDesert Foxâ over the skies of Iraq, on the ground 11 US companies were importing 40 shipments of Iraqi crude oil, a total of 15 million barrels and a 200% increase from the same month of the previous year. That was about 5.82% of the total US crude oil imports for that month, and the second largest Arab-OPEC member(after Saudi Arabia) to export oil to the US. Among the biggest US buyers were (and are): Chevron (7 shipments, 3.54 million barrels), Exxon (6 shipments, 3.066 million barrels) and Valero (16 shipments, 2.321 million barrels), according to Department of Energy and US Customs records. In fact, for the past two years US companies have imported more and more Iraqi oil. US oil imports from only average 89,000 barrels per day in 1997, jumped to average 915,000 barrels on October 1999 (6). In 1997, when the UN â Oil-for-Foodâ program was started, the US imported approximately 32 million barrels of crude oil from Iraq (89 thousand barrels per day), or 1.1% of total US imports. In 1998, the figure jumped to 122 million barrels (336 thousand barrels per day), or 3.86% of total US importsâa 378% increase from the previous year. Not surprisingly, in the first ten months of 1999 the US imported more Iraqi oil then in the previous two years combined. It imported approximately 210 million barrels (712 thousand barrels per day), or 8.2% of total US importsâanother 212% increase from the previous year (7). Keep in mind that 1999 has been a very militaristic year, with the US-UK using a maximum of deadly force against Iraq and bombing it almost every day. Strangely, while the United States and United Nations imposed a strict import-export embargo against Iraq, the US Government has no restrictions on US companies buying Iraqi oil from any source; yet some countries, like Iran and Libya, under the US sanctions it prohibit any companies from importing their oil. âThese are fairly significant political decisions no one has tried to grapple with.â A spokesperson from Independent Petroleum Association of America (IPAA) says (8). A US State Department official, speaking on condition of anonymity, said the US import Iraqi oil does not pose any ethical issue, nor violating any US laws. He says the US has no mechanism of monitoring the flow of Iraqi oil into the country, since Iraqi oil ONLY can be exported under the UN program and any Iraqi oil on the market is therefore âlegitimate.â The official further says the US does not only not forbid American companies to buy Iraqi crude from sources other than the UN program, but even buys it on the open market. International oil brokers or countries buy Iraqi oil from the UN program and then resell it at a profit, âand the US Government has no problem about it,â the official says. However, the official declined to discuss whether any oil companies or foreign governments had manipulated Iraqi oil prices. This is the weird irony of today's Iraq: on the one hand US/UK war planes continue to fly into Iraq daily and bomb any targets they please, while at the same time Iraqi oil continues to be exported under the UN "Oil-for-Food" program to the very countries who are bombing Iraq. >From Russia With Oil How does Iraqi oil end up in the United States? According to Iraqâs SOMO and the UN source in Baghdad, during phase VI of the UN oil program, nearly 1 million barrels per day of Iraqi crude oil reached US markets, estimated at 40 percent of total Iraqi sales (4). This amounts to approximately 7 percent of US total supplies, 12 percent of US imports, 6 percent of Gulf oil production; and over one billion dollars in annual savings for US oil companiesâone billion dollars less than they would pay Kuwait or Saudi Arabia for the same amount of crude (5). According to the press, SOMO officials, speaking on condition of anonymity, said the United States was buying Iraqi crude through Russian intermediaries who receive preferential treatment from Iraq as a reward for their govern ment's sympathetic stand on the sanctions. According from the UN records, at least dozen Russian companies participate on the scheme. Amount the Russian companies thereâs no doubt that Russiaâs state-owned Lukoil is the biggest player. Lukoil eager to be the âmiddle-manâ for US because Iraq owns Russia Billions of debts date back pre-Gulf War period, and its increased oil profit generated more income for the Russian government, and Putinâs presidential election bit. Who Decides the Oil Price? Really. Beside the vague answer âthe market determines the price,â in reality nobody can answer who it is that negotiates or decides the âmarketâ oil price. In fact, the world oil price is so artificially monopolized that it has nothing to do with the rules of supply and demand. For example: In mid-1996, the price of oil jumped to $23 per barrel and the premium unleaded gasoline price in United States was around $1.45 per gallon. Then the oil market plunged, and by the end of 1998 the price of oil was only 8 or 9 dollars--a 60 percent price drop within one-and-half years, the lowest point since the Arab oil embargo of the 70's. However, the US gasoline price didn't drop anywhere near the same ratio; it only dropped 35 cents, or around 24 percent, to $1.10 per gallon. Of course, there's a minimum cost to refine crude oil to gasoline, but such a big price drop certainly does not add up. Assume that average US oil imports are 10 million barrels per day. With a price gap of around $11 between 1996 and 1998, the possible extra profits for the oil companies were huge. Since phase I of the "oil-for-food" program, the international oil price dropped from its peak of 23-24 dollars in mid-96 to the lowest level of 8-9 dollars at the end of 1998. The last phase of the 3-year-old program was most profitable for Iraq. Firmer oil prices on international markets helped it earn $7.45 billion in six months. The halt of exports at current prices costs Iraq more than $40 million a day. End of the Good-O-Days? Why is oil from the Gulf region so important? Some oil trivia: on a typical day, the world consumes 73 million barrels of oil, which is about what it would take to fill up 200 million cars. About a quarter of this oil comes from the Gulf area alone, of which Saudi Arabia, Iran, Iraq and Kuwait are the largest suppliers. The world would simply stop running without this gigantic flow of oil. This is why the Gulf region is so important for the world and why its stability under western control remains one of the top priorities of the West, especially for the US global interests. Footnotes (1) Iraq `Cynical' to Reject Oil Deal- Albright; Reuters; Nov 22 1999 (2) It is well known that the Iraqi government and the UN inspectors don't get along. Iraq refused entry to the UN inspection team, the United Nations Special Commission (UNSCOM) return to Baghdad, after then Chief UN weapons inspector Richard Butler, (former Australian ambassador to the UN) and his UNSCOM teams walked away from Iraq, right before operation âDesert Foxâ in December 16th 1998. Iraq has always accused some UN inspectors of being US spies, accusations later confirmed by another former UN inspector, Scott Ritter, in his book âEndgameâ. Ritter also confirmed the longtime Iraqi suspicion that Richard Butler was indeed linked to the CIA. During Butlerâs inspection in Iraq between July 1997 to December 1998, he continuously confronted with Iraqi Government over the weapons inspection program, so Iraq cannot pass the weapon inspections and the sanction cannot be lifted. Butler always denied he is a US spy, but interestingly, after his step down on July 1999 from UNSCOM, heâ ll get a new job as diplomat in residence for the New York-based Council on Foreign Relations. (2a) It is clear that after the âDesert Fox,â UNSCOM operation in Iraq is dead. United Nations Monitoring Verification and Inspection Commission (UNMOVIC), created by UN Resolution 1284 on UN Security Council at December 17th, is a succession organization of UNSCOM. (3) Under the UN program, dollar amounts are more important then the amount of oil; Iraq can only export up to the UN-approved âceilingâ dollar amount of oil in each six-month phase of the program. If Iraq reaches its âceilingâ before the program expires, technically Iraq will not be allowed to sell more oil, and must then wait until the next phase of the program. Beginning of the Phase IV of the program, UN lift the ceiling to $5.25 Billion. However, Iraq oil price was so low that for the next two phases (IV, V) of the program, Iraqâs oil sales never able to reached the âceiling.â (4) UN statement, released in Baghdad; December 1, 1999 (5) Author's estimate, based on US Energy Information Administration (EIA) data. (6) Ibid. (7) Ibid. (8) In facts, his concern had been completely neglected by the US policy makers. IPAA has been criticizing Iraq, along with Venezuela and Mexico were â dumpingâ cheap oil to US, which caused the worldwide oil price collapsed in 1998. However, IPAA believes its entirely Iraqi President Saddam Hussenâs fault. (9) High oil prices had been helping all US oil company post record profits on 1999. Exxon-Mobilâs earning rose to $2.3 billion for fourth-quarter 1999, compare with $492 a year ago. And Chevronâs earning fourth-quarter 1999 earning is $343 million, compare with $106 a year ago. (10) Iraq: An Oil Giant Awakes; Energy Intelligence Group; March 12th, 1999 For More Information: "Report from Baghdad" July, 2003 Interviews, photos and Videos from Iraq: _http://www.actionla.org/Iraq/IraqReport/intro.html_ (http://www.actionla.org/Iraq/IraqReport/intro.html)
============================================================= Peace, No War War is not the answer, for only love can conquer hate Not in our Name! And another world is possible! Information for antiwar movements, news across the World, please visit: http://www.PeaceNoWar.net Please Join PeaceNoWar Listserv, send e-mail to: [EMAIL PROTECTED] Please Donate to Peace No War Network! Send check pay to: ActionLA/SEE 1013 Mission St. #6 South Pasadena CA 91030 (All donations are tax deductible) <><><><><><><><><><><><><><><><><><><><><><><><><><><><><><> *To Translate this page to Arabic, please visit ajeeb.com: http://tarjim.ajeeb.com/ajeeb/default.asp?lang=1 *To Translate this page to French, Spanish, German, Italian or Portuguese, please visit Systran: http://www.systransoft.com/ <><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><> **"Report From Baghdad" CD-ROM** Pacifica Radio KPFK Los Angeles Reporter Lee Siu Hin's July 2003 trip to U.S. occupied Iraq. An interactive CD-ROM with articles, photos, audio and video interviews includes: people of Iraq, U.S. military, human rights workers, religious leaders and more! Please Visit the Website: _http://www.actionla.org/Iraq/IraqReport/intro.html_ (http://www.actionla.org/Iraq/IraqReport/intro.html) Each CD costs: $15.00 plus $3.50 S/H (work both PC and Mac) The CD sells will be benefit the Baghdad Independent Media Center, ActionLA, and PeaceNoWar.net *Additional donations are welcome, and it will be tax deductible. For more information, tel: (213)403-0131 e-mail: [EMAIL PROTECTED] URL: www.ActionLA.org Send check/money orders to: ActionLA/SEE 1013 Mission St. #6, South Pasadena, CA 91030 [Non-text portions of this message have been removed] ------------------------ Yahoo! Groups Sponsor --------------------~--> Make a clean sweep of pop-up ads. Yahoo! Companion Toolbar. Now with Pop-Up Blocker. Get it for free! http://us.click.yahoo.com/L5YrjA/eSIIAA/yQLSAA/7gSolB/TM --------------------------------------------------------------------~-> --------------------------------------------------------------------------- LAAMN: Los Angeles Alternative Media Network --------------------------------------------------------------------------- Unsubscribe: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Subscribe: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Digest: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Help: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Post: <mailto:[EMAIL PROTECTED]> --------------------------------------------------------------------------- Archive1: <http://www.egroups.com/messages/laamn> --------------------------------------------------------------------------- Archive2: <http://www.mail-archive.com/[EMAIL PROTECTED]> --------------------------------------------------------------------------- Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/laamn/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
