From the Guardian Unlimited Iraq suspends oil exports Mark Tran and agencies Monday April 8, 2002 Iraq today jolted the oil markets by declaring an immediate halt to oil exports for a month, or until Israel stops its offensive against the Palestini ans. The move, announced by Saddam Hussein in a nationally televised speech, immediately sent prices of crude oil up by $1 to $27.35. In recent days, oil prices have risen to a six-month high, partly because of a pickup in the global economy, but also because of concern over the fallout from the Israeli-Palestinian conflict. Iraq first raised the prospect of using oil as a weapon early last week, a call that was quickly seconded by Iran, its traditional regional rival. But Iran's foreign ministry spokesman, Hamid Reza Asefi, later tempered that message by ruling out any unilateral moves. "This is not a decision that one country alone can make. It would be efficient if all Islamic and Arab countries cooperated on this issue," Mr Asefi said. However, today Libya jumped on the oil as a weapon bandwagon. "The great Jamahiriya (Libyan republic) supports Iran's call to stop oil supplies to countries that back the Zionist entity," the Libyan news agency Jana reported, quoting an unnamed government official. The report said that such a step, if supported by other Arab and Islamic oil-producers, would "stop the Zionist train of death in Palestine". Despite calls for using oil as a weapon against the west, the biggest oil producers in the Arab world, Saudi Arabia and Kuwait, have little appetite for taking this path. A meeting of Arab League foreign ministers on Saturday made no mention of oil proposal in its final statement. By itself, Iraq would have little effect on total oil production. Iraq exports 1.5 million barrels a day, but Opec is sitting on enough surplus production capacity to compensate for the loss of Iraq's exports three times over. Indeed oil traders have already factored the loss of Iraqi oil production into current prices price - about $2 to $3. Besides Opec, non-Opec producers such as Russia and Norway would be all too happy to step into gaps left by Iraq to increase their market share. The last time oil-producing Arab nations used oil as a political weapon was in 1973, when reduced exports caused a global energy crisis. Since then, the world's wealthiest nations have created the International Energy Agency (IEA) to provide a cushion against any similar disruption. Based in Paris, the IEA can tap into 4 billion barrels of strategic oil reserves maintained by its member countries - equal to more than five years of Iraqi production, based on t. But that consensus ishe IEA's estimate of Iraq's output in January. The oil shock of 1973 proved to be just as disruptive on Opec as on the oil-importing countries. For that reason, the oil cartel, led by Saudi Arabia, pledged in November 2000 not to use oil as a weapon breaking down with Israel's onslaught against the Palestinians.
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