April 10, 2002 Special Dispatch No. 366

Iraq Suspends Oil Exports: Tepid or No Reaction from OPEC Members

April 10, 2002
Iraq | Special Dispatch No. 366

Hardly 48 hours after President Bush and Prime Minister Blair declared that Saddam Hussein will be removed from office, came Saddam's reaction: to suspend his country's oil exports for one month, in solidarity with the struggle of the Palestinian people, effective immediately. He did not mention whether the suspension would affect oil smuggling via Syria, Turkey, or the Gulf, which is in violation of the UN embargo. The following addresses the reaction of the Arab world to Hussein's recent decision:

Saddam's decision to suspend oil exports was announced as a part of a speech to the "heroic and glorious" people of the "Great Iraq." Underlying the suspension of oil exports are four unstated objectives: first, is an attempt to destabilize the international oil market; second, to embarrass the conservative regimes of the Gulf; third, to appear as the true defender of the Palestinian people; and fourth, to try to appear as someone who is still to be reckoned with. Like most previous "dramatic statements" by Saddam, this one too appears to be based more on miscalculations than on political or economic wisdom. Two developments regarding the speech are worth noting:

First, no Arab leader would want to be seen as following the leadership of Saddam Hussein on a policy as serious as using oil as a political weapon. Most oil producers either declared they will not be affected by Iraq's decision or completely ignored it. The following is an example of such a reaction:

Ali Al-Nu'aymi, the Minister of Oil of Saudi Arabia, the largest oil exporter in the world, declared that the Palestinian case and the price of oil are two different issues. Saudi Arabia is committed to maintaining a "dependable and sustainable supply of oil."[1]

Kuwait declared that it did not intend to suspend its oil exports and would maintain its OPEC quota. The decision by "the leader of Baghdad" would not affect Kuwaiti considerations.[2]

The United Arab Emirates published the news together with a long quotation from White House spokesman Ari Feischer, which stated that the decision would not affect oil supplies.[3]

Shakib Khalil, the Algerian Minister of Oil declared that "OPEC refuses to use oil as a weapon." He added that there were non-Arab members of the organization whose interest should not be overlooked.[4]

Qatar and Oman published the news without comment. The same applies to Iran and Libya. More dramatic is Syria's silence. Being the recipient of subsidized, and illegal, oil from Iraq, Syria chose not to publish Saddam's decision in its two major official newspapers, Al-Thawra and Teshreen.

Iraq's newspaper Babil, published by Saddam's son, Udey, quoted Russian sources as saying that Iraq's decision was "a mistake."[5]

Second, with regards to Saddam's attempt to destabilize the oil market, the following headline in the London-based Al-Quds Al-Arabi is notable: "Suspension of Iraqi oil exports fails to destabilize the market and raises oil prices by $1 a barrel."[6]

[1] Al-Sharq Al-Awsat, April 9, 2002.

[2] Al-Watan, April 9, 2002.

[3] Al-Bayan, April 9, 2002.

[4] Al-Quds Al-Arabi, April 9, 2002.

[5] Babil, April 9, 2002.

[6] Al-Quds Al-Arabi, April 9, 2002.

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