Tuesday, June 20, 2006

Iraq oil minister criticises Iran over smuggling

Iraq's new oil minister accused Iranian coastguards on Tuesday of protecting smugglers shipping oil out of Iraq.

"We blame the Iranian coastguards for letting Iraqi smugglers' boats ... reach the Iranian coast and protecting them until they reach the open sea," Hussain al-Shahristani said in an interview on state television in which he said he would crack down on corruption and crime to improve supplies and revenues. READ MORE

Asked by Iraqiya television if he had protested to Tehran, Shahristani declined to comment further.

Smuggling abroad of oil purchased in Iraq at subsidised prices is blamed by officials for shortages for consumers in a country with the world's third biggest confirmed oil reserves and also for losses of government revenues.

Smuggled oil is shipped from Iraq's southern fields around Basra, across the Shatt al-Arab waterway dividing Iraq from Iran and down the Iranian coast into the open waters of the Gulf.

Shahristani, a Shi'ite Islamist appointed last month whose political allies are close to Iran, said his ministry was clamping down on subsidised sales and freezing out middlemen.

He said Iraq had problems with other neighbouring states. Smugglers also take oil out through Turkey and Syria, officials say. Shahristani alluded to disputes over the extraction of oil from fields that lie across its borders -- these are notably on the border with Kuwait, but also Iran.

"We have other problems with most of our neighbours, regarding smuggling and exploiting shared fields," he said.

The rise of Iraq's Shi'ite Muslim majority since the fall of Saddam Hussein has brought Baghdad's government close to Shi'ite Iran, with which Saddam fought a major war in the 1980s.