Gas Prices Should Drop Due To New U.N.-Iraq Agreement

 

KNOXVILLE, Tenn. — Americans may pay less for gasoline at the pump when suffering Iraqis begin receiving food and medicine, a University of Tennessee economist said Monday.

The United Nations and Iraq announced Monday an agreement permitting Iraq to sell a limited amount of oil — $1 billion every 90 days — to buy food and medicine.

Dr. Ziad Keilany, a petroleum specialist at UT-Chattanooga, said the accord has two implications — one physical and one psychological.

The addition of Iraqi oil to the world supply sooner or later, probably later, will lower crude oil prices, he said.

“Even more important is the psychological implication,” Keilany said. “This agreement suggests the U.N. might agree to Iraq selling a greater amount as the need develops. So there’s an implication the quantity may increase in the future and have another impact on oil prices.”

The agreement allows Iraq to export oil for the first time since the U.N. imposed sanctions to punish Iraq for invading Kuwait in 1990.

U.N. Security Council officials have said they will not lift sanctions fully until Iraq complies with U.N. orders to dismantle its weapons of mass destruction.

Contact: Ziad Keilany (423-755-4116)

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