Iraqi oil threat deadline looms

BAGHDAD, Iraq -- Iraq remained defiant hours before it began to implement its threat to halt all crude oil exports from Monday in protests against proposed changes to U.N. sanctions.

In an official statement, Iraq said on Sunday it can live without the U.N. oil-for-food program and vowed to take measures against countries that support the changes.

In a front page editorial, the ruling party newspaper Al-Thawra said Iraq lived six years between 1990 and 1996 without this "lame program which covered only a small portion of Iraq's needs."

Baghdad's stance follows its decision Saturday to halt all crude oil exports at 1 a.m. EDT on Monday.

The decision was in reaction to the U.N. Security Council's decision on Friday to extend by one month the U.N. oil-for-food deal.

The extension is intended to allow the United States and Britain more time to get Security Council backing for their so-called "smart sanctions" proposal.

The U.N. oil-for-food plan was set up in 1996 to help ordinary Iraqis cope with the effects of U.N. sanctions imposed to punish Iraq for its 1990 invasion of Kuwait.

"The Americans and the British are mistaken if they think that Iraq cannot live without this (oil-for-food) program and, consequently, it will accept anything imposed on it," Al-Thawra said.

The newspaper warned that "all countries should care for their national interests, which shall be damaged if those countries get involved in the American-British game."

It said Iraq would take "whatever necessary measures" against countries supporting the smart sanctions proposal.

Iraq has warned neighbours Jordan, Syria and Turkey that it would halt oil supplies to them if they accepted the sanctions proposal. Iraq has the world's second-largest reserves of oil after Saudi Arabia.

"Iraq halted its oil exports, and it is prepared to face the worst possibilities," the newspaper said.

Saudi Arabian Oil Minister Ali Naimi said on Saturday that the Organization of the Petroleum Exporting Countries (OPEC) was ready to cover any shortfall in world oil production following Iraq's decision to halt exports.

Other OPEC nations are pumping at top capacity, but Naimi said Saudi Arabia alone is capable of covering any shortage.

OPEC Secretary General Ali Rodriguez played down the potential impact of a disruption in Iraqi oil exports.

"We'll cross that river when we come to it," he said.

Iraq produces about 3.2 million barrels of oil per day, of which about two million barrels per day has been exported under the U.N. oil-for-food program.

Iraq also pumps for domestic consumption and under a separate, U.N.-accepted arrangement for supplying oil to neighbouring Jordan.