Iraq resumes oil shipments as resistance mounts

IRAQ re-entered the world oil market yesterday with its first shipment of crude since the war, but sabotage and looting along its largest pipeline delayed the flow of freshly pumped oil — the key to the reconstruction of an economy devastated by sanctions and war.

In a reflection of the vulnerability of the country's decrepit oil infrastructure, a huge fire burned from a fuel pipeline west of Baghdad after an explosion, apparently caused by saboteurs.

South of the capital, attackers fired a grenade at a US military vehicle, killing one American soldier and wounding another.

A wave of attacks have killed 17 Americans since major fighting was declared over on May 1.

Opponents of the US-led coalition have also targeted Iraq's gas and oil network and other infrastructure, hurting efforts to get the country's most valuable resource moving again.

The US chief administrator of Iraq, Paul Bremer, yesterday told the World Economic Forum that security is a prerequisite for putting Iraq on the road to recovery.

Yesterday's oil shipment marked a key first step.

Iraq has the second largest oil reserves in the world, and all proceeds from sales are to go into a US-controlled fund for use in rebuilding battered infrastructure and an economy devastated by more than 12 years of UN economic sanctions.

The pipeline explosion, which sent flames shooting into the sky, did not affect the resumption of exports, but the apparent sabotage near the town of Hit highlighted recent attacks on fuel pipelines and other infrastructure, hampering the drive to repair Iraq's vital oil industry which US and British administrators are relying upon to finance reconstruction.

The damaged pipeline, 95 miles west of Baghdad, carries gas not oil from the city of Kirkuk, 150 miles north of Baghdad, to various parts of Iraq.