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Iraq to restart oil pumps
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July 3, 2001: 8:06 a.m. ET
Iraq claims sanctions victory, OPEC to keep oil output steady
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LONDON (CNN) - Iraq says it is set to resume pumping oil after the U.S. and Britain abandoned a bid to bring in "smart" sanctions against it.
Baghdad ceased oil production under the United Nations-supervised oil-for-food programme last month in protest at attempts by the U.S. and UK to alter the 11-year-old Gulf War embargo.
Britain and America on Monday dropped their proposal, which called for the plugging of lucrative Iraqi oil smuggling routes and tightening of the arms embargo against Baghdad, after Russia threatened to veto the idea at a U.N. meeting.
Russia is Iraq's main supporter on the U.N. Security Council.
Instead, the U.N. oil-for-food programme is expected to be resumed for five months at the meeting in New York later on Tuesday.
Iraqi state-run newspapers have celebrated the U.N. stance as a victory for Baghdad.
The Iraqi military's Al-Qadissya newspaper said: "The smart sanctions resolution was stillborn," adding the delay "is a victory for Iraq's rights."
The embargoes against Iraq were imposed after its 1990 invasion of Kuwait, and under Security Council resolutions cannot be lifted until U.N. inspectors, currently barred by Baghdad, have certified the country has dismantled its weapons of mass destruction.
Iraq earlier said it would resume oil production if the oil-for-food programme, which allows it to sell oil for humanitarian purposes only, remains unchanged.
Speaking in Vienna, Austria, where OPEC ministers are meeting to agree oil production quotas, CNN's Charles Hodson said: "Iraq has said it can begin producing 2.1 million barrels of oil a day immediately."
Members of the Organization of the Petroleum Exporting Countries have said they are ready to keep oil output limits unchanged at 26.2 million barrels a day.
OPEC President Chakib Khelil told Reuters news agency: "There will be no increase in production, definitely not. There is a consensus on that."
But the move does not necessarily mean motorists across Europe will enjoy a period of static petrol prices, as oil production quota decisions can take up to a year to filter through to the petrol pumps.
Brent crude is currently priced at $25.38 a barrel for August delivery. 
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