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Consultations on Iraq (oil for food)
The oil overseers briefed Council
members on the current situation regarding the oil pricing mechanism.
They have determined that a premium of 5 cents per barrel is the
maximum which the contracters could reasonably get. They have observed
that since Decembre 2000 the premium has reached in average an amount
of 30 cents per barrel and that Iraq has almost never asked for a
change of the official selling price when the market prices rose. Council
members discussed whether this excess premium could be paid back to
Iraq. In any case this meant a loss of resources for the "oil for
food" programme. Several Council members were of the view that
one way to try to reduce this excess premium is to shorten the review
period of oil price. Others thought it might destabilize the whole
system. No consensus has been found among Council members on such a
measure. Council members discussed also the procedure followed by the
661 committee. Some members recalled that all decisions are taken on
the basis of consensus and that there is still no agreement to change
this rule.
Finally the president concluded that
there was an agreement to have a weekly briefing by oil overseers on
the current state of the oil market and that all delegations should
show flexibility to resolve all contentious issues in the 661
committee, including on oil pricing mechanism./.
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