By Richard Beeston
The Times (London)June 5, 2000
Britain has warned the Gulf states and Iran that they are helping President Saddam Hussein of Iraq to remain in power by collaborating in a multimillion-pound oil smuggling operation. According to senior British sources, the Iraqi regime is able to bypass UN sanctions by using an elaborate shipping operation through the Gulf and on to markets in the Far East and the West.
Ironically the smuggling is being conducted with the help of Iraq's rivals in the region, including Iran, the United Arab Emirates and third parties, who are making huge profits transporting and selling Iraqi crude. A senior British source, clearly frustrated by the failure of the Gulf states to help the US and British blockade of Iraq, told regional envoys this week: "We spend time and energy to stop him exporting oil illegally. If similar dedication was shown by the Gulf countries we would be successful."
The Iraqi oil, believed to be at least 100,000 barrels a day, travels down the Shatt al-Arab waterway through Iranian waters into the UAE and from there to the world market.
According to American sources, quoted in the Los Angeles Times, the volume has become so great that the Iranian Revolutionary Guards, who control the contraband oil in Iranian waters, have opened the island of Qeys as a trans-shipment point. Once it leaves Iranian waters it is transported to Dubai or Fujairah in the UAE, where it is often mixed with other crude to disguise its origin. The only successful interdiction occurred earlier this year when the US Navy seized a Russian oil tanker and forced it to unload. It was found to contain Iraqi crude. In addition to the main Gulf route, other smaller scale smuggling is also being conducted north into Turkey and west into Syria.
The sanctions-busting export business has been made increasingly profitable by the high oil price, currently about $ 30 a barrel, combined with growing disillusionment in the Middle East about the effects of sanctions against Iraq, which have been in place for nearly a decade. This week Iraq reopened its embassy in the UAE, the fourth Gulf country to re-establish diplomatic relations since the invasion of Kuwait in 1990. Last month Qatar openly called for the sanctions on Iraq to be lifted.
Although Iran has promised to try to tackle the contraband shipments, a senior official challenged on the subject this week dismissed the problem as "only a few barrels". Instead he blamed the West for keeping the Saddam regime in power. However, British and US officials said that the smuggling operation, worth about Pounds 2 million a day, is not only helping Saddam to survive, it is strengthening his position.
Although the Iraqi people are suffering terrible deprivations because of the economic boycott on the country, the illicit oil revenues are used to import luxury items for Iraq's ruling elite, particularly the military, the intelligence services and Saddam's clan. The cashflow is thought to have helped Iraq to revive its military infrastructure, supposedly destroyed by allied air raids. Last month Iraq conducted tests of the short-range al-Samoud ballistic missile, capable of carrying conventional, biological or chemical warheads.
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