Oil chief killed after pipeline sabotage

16 June 2004
The security chief for Iraq's northern oil fields, Ghazi Talabani, was assassinated outside his home on 16 June just a day after the main export pipelines in both northern and southern Iraq were sabotaged.

The victim was related to Kurdish political chief Jalal Talabani. Kirkuk police chief General Turhan Yusuf confirmed his death.

Bomb attacks on 14 and 15 June shut down all crude oil exports from Iraq's southern terminals Basra and Khor al-Amaya - Iraq's main export route. There was also an attack on a pipeline in northern Iraq on late on 15 June. Northern Oil Company officials said the explosion occurred between Dibis and a pumping station near Kirkuk.

Until last week, Iraq was exporting about 1.6 million barrels a day (b/d) through Basra, but exports from Basra are now at a complete halt. Experts say repairs will take up to 10 days. Analysts estimated the suspension of exports would cost Baghdad nearly $60 million a day.

Iraqi oil exports are still below the pre-war level, despite the establishment of a 14,000-strong Iraqi guard force which specifically protects pipelines and other oil infrastructure. According to Iraqi Prime Minister Iyad Allawi, pipeline sabotage has cost the country more than $200 million in lost revenues over the past seven months.

However, crude oil prices fell in spite of the attacks, marking a sharp shift in the oil market, which until recently was extremely nervous about oil supply disruptions in the Middle East. The attack on the Iraqi pipelines only resulted in a temporary rise in prices before a decline resumed. Brent crude for July delivery fell 20 cents to $35.29 a barrel in London, which erased the 14 June gain of 5 cents. August Brent crude was 48 cents lower at $35 a barrel. Nymex light, sweet crude for July slid 40 cents to $37.19 a barrel in New York.

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