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Hussein Suspends Iraqi Oil Exports in Protest

Embargo: The effort to show disapproval of Israel's offensive is expected to hurt Iraqis more than those who buy the commodity.


CAIRO — Iraq suspended oil exports Monday to protest Israeli military actions in the West Bank, a strategic decision that caused the world price of crude oil to jump and increased pressure on Arab regimes to take action against Israel and the United States.

In a speech beamed by satellite to all corners of the Arab world, Saddam Hussein sought to present himself as the only Arab head of state willing to act on behalf of the Palestinians. His go-it-alone embargo is expected to have a far greater impact on the tense political landscape of the Middle East than on world oil supplies, especially if Israel continues its offensive and other countries follow Iraq's lead.

The price of oil jumped by about $1, to $26.98 a barrel, after the announcement, before closing in New York at $26.54, a 33-cent increase. Perhaps a more telling barometer of the decision's impact came in a statement issued by the radical Islamic group Hamas. It accused Arab leaders of treason to "God and the nation of Islam," praised the Iraqi gesture and called on other regimes to follow suit.

The Arab public is burning with anger over the Israeli military operation and America's support for the Jewish state. Radical voices are dominating the public dialogue. After Sept. 11, it would have been unthinkable for crowds to march in Jordan chanting Osama bin Laden's name, even if they had wanted to. But they were doing just that on Monday.

Iraq's gesture also undermined the White House effort to oust Hussein from power.

"Saddam Hussein is trying to incite the street and embarrass the oil-producing countries," said one well-placed Arab official. "He is cashing in on the fact that the street is boiling, watching what is unfolding. He is trying to exploit this to his advantage."

Throughout the 18-month Palestinian intifada--including Israel's current offensive--Arab regimes have resisted taking any tough measures such as imposing a coordinated oil embargo or opening their borders to allow volunteers to fight alongside the Palestinians. Those steps are perceived by leaders from Riyadh to Cairo as against their own political, social or economic interests.

But as the Israeli operation continues, that calculation is changing. Egypt and Jordan, the only two Arab states to have signed peace treaties with Israel, are under pressure to expel Israeli diplomats and sever all ties with the Jewish state. Both have indicated that they will have to respond to pressure from the street if Israel does not relent soon.

Oil as Political Tool Seems More Relevant

Persian Gulf states that rely on oil sales for most of their revenue are also feeling pressure to use the commodity for leverage.

"The question of oil as a political tool really is becoming very relevant now," said Radwan Abdullah, a political analyst in Amman, the Jordanian capital. "There is a feeling of anger among the masses in a way never felt before. If there is nothing forthcoming in political negotiations, or at least an end to the massacres, it will become a relevant question in the near future."

But even if the immediate crisis calms, America's interest in the region may already have been permanently damaged. Moderate regimes have historically argued to a skeptical public that ties with the United States gave them a means to advocate the Arab cause. But these days, the perception is that Arab voices are going unheard in Washington.

Arab leaders are holding their collective breath, hoping that events in the West Bank cool before they are pushed to take some action that will hurt them too.

"We all applauded the American statements for telling Israel to comply with American demands. We are watching and observing the behavior of the United States," said an informed source from a Gulf state who declined to be identified because of the volatility of the situation. U.S. credibility was on the line, the source added.

For months, as U.S. officials tried to round up support to topple the regime in Iraq, Hussein also sent his emissaries to lobby in Arab capitals. His surrogates even reopened talks with the United Nations about allowing weapons inspectors back into the country.

On Monday, Hussein himself delivered Iraq's message.

"The Iraqi leadership declares the complete stoppage of oil exports starting from this afternoon--for a period of 30 days, when we will further decide policy, or until the Zionist entity's armed forces have unconditionally withdrawn from the Palestinian territories," he said, standing at a lectern.

Playing to feelings of hurt pride and victimization among Arabs, he said that Israel and the United States had "belittled the capabilities" of Arabs.

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