State of Iraqi oil conflicted

FAW, Iraq -- The status of Iraq's crucial oil exports was mired in confusion Tuesday, with government and industry officials giving contradictory statements about whether oil was flowing or whether there were even oil tankers at the main offshore terminal near Faw.\nTwo top officials with the state-run South Oil Co. said Tuesday that oil shipments from southern Iraq -- which account for 90 percent of the country's exports -- remained halted after weekend attacks on pipelines and oil fields. But another said exports were running at 800,000 barrels a day, about half the normal flow.\nMeanwhile, people at the port in the Faw Peninsula, including an oil smuggler there, said no tankers had even been there since late Sunday.\nDespite the questions about Iraq's exports, oil prices dipped Tuesday as traders continued a selloff amid easing fears that disruptions in Iraq, Russia or Venezuela could cause a supply squeeze. After a 90-cent decrease Monday, October contracts for light sweet crude decreased a penny to $42.27 on the New York Mercantile Exchange -- well below peaks above $48 a barrel in mid-August.\nIndustry experts said some of the confusion about Iraq's situation might be more about semantics than anything else.\n"Although loadings are continuing, the pipeline flow is unclear, leaving open the question of whether loadings are from (oil previously put in) storage (tanks) or from freshly pumped product," said James Steel, director of commodities and oil research at Refco, a New York-based brokerage. "I think the loadings are from storage; I don't think they're from pipelines."\nJeff Goetz, an oil trading and transport consultant in New York, said he received word from oil companies and tanker companies scheduled to pick up crude in southern Iraq later this week that shipments would be delayed.\n"They'll be delayed five days, maybe seven," said Goetz, head of marine projects at Poten & Partners. "I don't know the extent of the damage to the pipelines. But generally speaking, they get repaired very quickly."\nHe also said two oil tankers were scheduled to pick up 1 million barrels of oil each over the next week or so in Ceyhan, Turkey, which is the terminus of a pipeline running from Iraq's northern oil fields. But he said those would be the only shipments to occur in the past month.\n"There is activity out of Ceyhan, but it's significantly down," Goetz said.\nAn Associated Press reporter who went to the Faw terminal to check on operations was prevented from entering by British troops. British military officials said they did not have information on the oil flow and referred journalists to South Oil Co.\nDow Jones newswires quoted unidentified shipping agents as saying four tankers were at the oil terminal near Faw, two loading crude at a rate of more than 1.7 million barrels a day, a third waiting to take on cargo and one that had finished loading.\nA U.S. military official in the Persian Gulf region told AP that he had been briefed that four tankers were docked at the offshore terminal, but he was unsure whether the ships were taking on oil. The official spoke on condition he not be identified.\nIraq's oil industry, which provides desperately needed money for Iraq's reconstruction efforts, has been the target of repeated attacks by insurgents in recent months.\nInterim Prime Minister Ayad Allawi said Tuesday that sabotage of oil pipelines has cost the country more than $1 billion.\n"This money that we have lost is money for reconstruction," Allawi said. "The treasure of Iraq is enough for the Iraqis to live respectably."\nAssociated Press Business Writer Brad Foss in Washington contributed to this report.