- The Washington Times - Wednesday, April 23, 2003

An estimated 8 million barrels of Iraqi crude are sitting in tanks at Turkey's Ceyhan port waiting for buyers. There are prospective buyers, but some international lawyers are advising clients not to risk the purchases. That's because, with Saddam Hussein's regime dismantled and no transitional government firmly installed, the debate now centers on who holds the title to the oil. "People are absolutely terrified that if the person they buy the oil from doesn't actually own the oil, then when an authority is established they could be liable for the value of the oil they thought they had already bought," Juliet Blanch of the international law firm Norton Rose told the Financial Times yesterday. An indemnity guarantee from the United States could resolve the issue, though and time is of the essence.
The lack of oil exports means Iraq is losing $50 million a day, or an estimated $1.5 billion a month money urgently needed by the Iraqi people to aid in the costly reconstruction of their country. Turkey is suffering as well, losing hundreds of millions in sales and pipeline fees.
Some experts have proposed that the United Nations offer indemnity or establish yet another bureaucracy to sell the oil on behalf of Iraq. However, there are several reasons why that idea should be rejected out of hand, including the fact that the United Nations has yet to act on President Bush's request to lift the post-Gulf War sanctions on Iraq. Also, France and Russia are concerned that the United States wants control of Iraqi oil sales before a transitional authority is in place.
In Washington, even Democrats on Capitol Hill agree that Iraqi oil proceeds should be used to finance the rebuilding efforts the long-term costs of which remain uncertain, with some estimates ranging from $25 billion to $100 billion. What is certain, however, is that Iraq sits atop the second-largest pool of proven oil reserves, and that it won't take much to return Iraq to its prewar export limit of 2 million barrels a day.
The bottom line is that U.S.-led military forces continue to protect Iraqis even as the legal complications of Iraq's oil are being debated. America should establish an indemnity program for the sale of Iraqi oil at least for the first month (exposing the Treasury to a contingent liability of about $1.5 billion). This will get the oil reserves flowing, show the Iraqi people that we spend for peace as well as war, and it will show the Russians and the French that we will not submit to blackmail.

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