Boutros-Ghali postpones Iraqi oil-for-food deal

September 1, 1996
Web posted at: 7:00 p.m. EDT

UNITED NATIONS (CNN) -- Secretary-General Boutros Boutros- Ghali, citing "the deterioration of the situation in northern Iraq," announced Sunday he would delay a deal to let Iraq sell limited amounts of oil to buy food and medicine.

Boutros-Ghali said he had delayed sending U.N. personnel to Iraq to implement the deal.

Iraqis had hoped the oil would start flowing this month. The plan would allow Iraq to sell $2 billion worth of oil over six months to buy humanitarian supplies.

Boutros-Ghali "is following the situation closely, and he is in continuing contact with the United Nations coordinator in Baghdad," said the secretary-general's statement, which also noted all U.N. personnel in northern Iraq were safe.

Iraq has been barred from exporting oil under U.N. sanctions since Saddam Hussein invaded Kuwait in 1990.

Baghdad agreed last June to the relief plan, which was to go into effect as soon as Boutros-Ghali informed the Security Council that all arrangements were in place.

Oil prices appeared set to rally Monday as the new tensions in Iraq were seen to threaten supplies from the Middle East. Iraq's weekend incursion into the northern Kurdish city of Irbil comes at a time when global oil inventories are low.

The Associated Press and Reuters contributed to this report.

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