The United States warned Iraq Wednesday not to exploit concern over surging oil prices for political gain, but downplayed fears Saddam Hussein could further spike the market by cutting production.
As prices oil ballooned, triggering protests across Europe, Iraq last week accused Kuwait of stealing oil -- just as it did in 1990 before sending its troops across the emirate's borders.
"Our red lines are clear," said State Department spokesman Richard Boucher."If Iraq reconstitutes its weapons of mass destruction programs, threatens its neighbors, or US forces, or moves against the Kurds, we have a credible force in the region and we're prepared to act in an appropriate time and place of our choosing."
"The fact is, Iraq shouldn't be trying to threaten its neighbors, whether it's Saddam Hussein or one of his ministers," said Boucher. Boucher also said the United States would be ready in the "highly unlikely" event that Saddam Hussein cuts oil production in order to push up the already surging prices.
"We have looked at this situation with regard to Iraq's exports, because, as you all know, Iraq is pumping as much as it ever did in the past."
Saudi Arabia and other oil producing nations had excess production capacity that could cover any shortfall in supplies, he said. And Washington's own Strategic Petroleum Reserve had 570 million barrels, enough to cover any shortfall in Iraqi supplies for a year and a half, he added.
Kuwaiti leaders have said the tension in the region now is as high as it was before the invasion, which prompted the United States to assemble an international coalition to expel Saddam Hussein's forces.
Iraq's official media on Wednesday shrugged off any threat of US military action saying the country was not afraid of the United States.
Concern that Iraq could attempt to manipulate the oil market has been mounting along with oil prices.Iraq pumped a record three million barrels in August and analysts fear that any sign that it will cut production could start a chain reaction leading to a global recession.
US Senator John McCain said Sunday he was "deeply worried" Saddam Hussein could cause chaos by such a move, and said the United States should renew efforts to overthrow him "through covert activity."
Oil prices surged again in London on Wednesday despite fresh indications from OPEC that it was ready to pump more oil in October if prices continued to rise.
The benchmark Brent North Sea crude oil for November delivery rose by over a dollar to 34.81 dollars a barrel before falling back to 34.44 dollars in afternoon trading, against 33.63 dollars at the close on Tuesday.
President Bill Clinton said Tuesday it would take him "a few more days" to guage the impact of a recent decision by oil producing nations to hike output. Iraq, which has the second-largest oil reserves in the world after Saudi Arabia, is obliged to sell its crude in exchange for basic goods and medicines under the UN oil-for-food programme as part of the punishment for invading Kuwait in 1990.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)
