ARAB-US RELATIONS - Feb. 19 - Focus On Iraq-Syria Oil P/L.

A report in IHT says Secretary Powell's Middle East tour will focus on US efforts to close - or put under UN control - the recently re-opened Kirkuk-Banias pipeline through which Syria is receiving about 120,000-150,000 b/d of Iraqi crude oil and paying to Baghdad money outside the UN framework. (But the Arab World is angry at the US after the Feb. 16 US-UK air strike against Iraq while Washington is letting Israel suffocate the Palestinians - see above). The IHT report says: "The Iraqi regime of Saddam Hussein has dramatically boosted the amount of oil revenue it obtains outside UN sanctions over the past three months, primarily by pumping as much as $3m worth of petroleum a day through a newly reopened Syrian pipeline... General Powell's mission has been complicated by American and British air strikes... which were condemned not only by frequent critics Russia and China, but also by the Arab League and a NATO ally, Turkey, a crucial member of the military coalition against Iraq...

In announcing his coming trip a week ago, General Powell said the UN sanctions were established 'for one purpose, and that was to keep Iraq from threatening its neighbors with weapons of mass destruction'. He said in a subsequent interview...he would try to make sure that 'we do what is necessary to keep Hussein contained so that he cannot get access to weapons of mass destruction and that we control the money available to him'. To achieve that, American officials will have to put their fingers in numerous leaks, including the illegal Iraqi surcharges on oil sales administered by the UN; petroleum smuggling through Turkey, Jordan and Iran; and, perhaps most urgently, the Syrian pipeline...

With analysts estimating that Iraq is offering Syria a sharply discounted price of about $15 a barrel, the shipments could be yielding $2m to $3m in revenue daily outside the UN controlled accounts. US officials began talking with their Syrian counterparts about the pipeline, which was closed 19 years ago during the Iran-Iraq War, after initial industry reports in November that Syrian exports of crude oil had suddenly been spiked. This indicated that Syria was tapping Iraqi supplies to meet local demand and exporting oil that was produced domestically. Syria says it is receiving only enough oil to test the pipeline. The Bush administration has encouraged Syria to bring the pipeline into conformity with the sanctions, offering to allow it to import Iraqi oil as long as the revenue is deposited in a UN account for the purchase of food and medicine for the Iraqi population. American officials at the UN have also tried to press Syria on the pipeline but feel thwarted by French diplomats, who do not want Syria singled out. France, along with Russia and China, has long argued on the Security Council for easing the sanctions". (80,000 b/d of oil and diesel are being smuggled from northern Iraq into Turkey aboard hundreds of trucks that have plied the border for years. But because Turkey provides a crucial air base used by American aircraft patrolling over Iraq, US officials are hard-pressed to demand that Ankara crack down on the lucrative trade).