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Voice of America
DATE=2/28/97
TYPE=CORRESPONDENT REPORT
NUMBER=2-210736
TITLE=IRAN/IRAQ OIL (L-ONLY)
BYLINE=ED YERANIAN
DATELINE=BEIRUT
CONTENT=
VOICED AT:

INTRO: SCATTERED REPORTS FILTERING OUT OF THE PERSIAN GULF SUGGEST THAT IRAQ IS SMUGGLING UNKNOWN QUANTITIES OF OIL WITH THE HELP OF IRAN IN ORDER TO CIRCUMVENT U-N ECONOMIC SANCTIONS IMPOSED ON IRAQ AFTER ITS 1990 INVASION OF KUWAIT. IRAQ IS LEGALLY ALLOWED TO SELL ONE-BILLION DOLLARS WORTH OF OIL EVERY SIX MONTHS AS PART OF A FOOD-FOR-HUMANITARIAN AID DEAL. WHILE NO ONE IS QUITE SURE HOW MUCH OIL IS BEING SMUGGLED, NOR TO WHAT EXTENT IRAN IS PARTICIPATING IN THE VENTURE, BOTH COUNTRIES WOULD SEEM TO BE MAKING ECONOMIC GAINS FROM THE OPERATION. FROM BEIRUT, REPORTER EDWARD YERANIAN HAS DETAILS.

TEXT: UNITED STATES NAVY PATROLS HAVE SKIRMISHED WITH SHIPS SMUGGLING IRAQI OIL SEVERAL TIMES DURING THE PAST COUPLE OF MONTHS. ADMIRAL THOMAS FARGO, COMMANDER OF THE U-S FIFTH FLEET, HAS SAID THE SMUGGLING OPERATION WAS SOPHISTICATED AND UNDER TIGHT IRANIAN CONTROL.

ANALYST JULIAN LEE WITH THE LONDON-BASED "CENTER FOR GLOBAL ENERGY STUDIES" AGREES:

I THINK IT'S FAIRLY CLEAR THAT IT'S HAPPENING. A NUMBER OF SMALL VESSELS HAVE BEEN INTERCEPTED IN THE GULF CARRYING OIL AND OIL PRODUCTS THAT ARE FAIRLY CERTAIN TO HAVE ORIGINATED FROM IRAQ.

BUT, SAYS MR. LEE, THE QUANTITIES ARE RELATIVELY MINOR.

THE AMOUNT THAT IS BEING SMUGGLED IS VERY UNCLEAR. IT IS PROBABLY IN THE RANGE OF TENS OF THOUSANDS OF BARRELS A DAY -- WHICH COMPARED WITH IRAQ'S CURRENT PRODUCTION OF OVER A MILLION BARRELS A DAY IS REALLY VERY SMALL.

BUT EVEN TEN-THOUSAND BARRELS A DAY TRANSLATES INTO MORE THAN 40 MILLION DOLLARS A YEAR, GROSS REVENUE.

ADMIRAL FARGO PLACED RESPONSIBILITY FOR THE OPERATION ON IRAN'S REVOLUTIONARY GUARDS. AND BEIRUT-BASED ECONOMIST MARWAN ISKANDAR SAYS THE REVOLUTIONARY GUARDS HAVE SUFFICIENT FINANCIAL MOTIVATION TO BE HELPING THEIR ONCE BITTER ENEMY, IRAQ.

IRAN HAS EXPORTED OIL ON BEHALF OF IRAQ AND FOR THE ACCOUNT OF IRAQ, AND HAS SECURED FOR THESE OPERATIONS SUBSTANTIAL FEES. AT TIMES ON THE ORDER OF ... FIVE DOLLARS A BARREL -- MEANING, THEY WERE CHARGING PRACTICALLY 30 PERCENT OF THE PRICE.

PROFESSOR NIZAR HAMZEH, AN IRAN EXPERT AT THE AMERICAN UNIVERSITY OF BEIRUT, SAYS POLITICAL MOTIVES ARE ALSO PROMPTING IRANIANS TO HELP IRAQ. AFTER ALL, HE SAYS, THEIR COUNTRY IS ALSO UNDER ECONOMIC SANCTIONS.

IRAN FEELS VERY MUCH SURROUNDED BY A BLOCKADE BY WESTERN INTERESTS AND ESPECIALLY THE U-S, SO THIS IS SOME SORT OF RAPPROCHEMENT POLICY WITH THE IRAQIS.

LONDON ANALYST JULIAN LEE ALSO THINKS IRAN HOPES TO PREVENT SADDAM HUSSEIN FROM BEING TOPPLED, AND SO AVOID A MORE PRO-U-S REGIME FROM TAKING HIS PLACE.

IRAN IS VERY INTERESTED IN SEEING THE REGIME IN IRAQ SURVIVE. IT DOESN'T WANT SADDAM HUSSEIN'S REGIME TO BE REPLACED BY A GOVERNMENT THAT IS MORE PRO-U-S. IRAN AND IRAQ ARE BOTH, AT THE MOMENT, TARGETS OF THE U-S POLICY OF DUAL CONTAINMENT. IF SADDAM IS TOPPLED AND REPLACED BY A PRO-U-S REGIME IN IRAQ, THEN IRAN AUTOMATICALLY BECOMES THE SOLE TARGET OF U-S CONTAINMENT IN THE GULF.

//OPT// THE FRENCH PRESS AGENCY REPORTS IRAQIS ARE USING THEIR BLACK-MARKET OR PROFITS TO BUY ELECTRONIC GOODS AND FANCY FOOD-STUFFS IN BOTH DUBAI AND IRAN.//END OPT// IRAQI OPPOSITION SOURCES CLAIM THE PROFITS FROM THE OPERATION GOT TO MEMBERS OF SADDAM HUSSEIN'S FAMILY.

(SIGNED)

NEB/EY/PCF/KL

28-Feb-97 9:48 AM EST (1448 UTC)
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