State Department Noon Briefing, September 20, 2000

U.S. DEPARTMENT OF STATE
DAILY PRESS BRIEFING
WEDNESDAY, SEPTEMBER 20, 2000

Briefer:  Richard Boucher, Spokesman

Q: Iraq: Are you worried that Saddam Hussein could do something that
would spike oil prices? He seems to - if he cut back his production,
would drive prices up and that could have reverberations here and
elsewhere. Is this something that you're worried about?

MR. BOUCHER: We have certainly looked at the situation with regard to
oil prices. It's something we care a lot about. We discuss it a lot in
our meetings, not necessarily with regard to Iraq. But the situation
regarding oil in the world today is one of concern to us.

We have looked at this situation with Iraq's exports because, as you
all know, Iraq is pumping as much as it ever did in the past. But the
numbers are as follows: Iraq exports about 2.4 million barrels a day.
Saudi Arabia and other oil-producing nations have excess production
capacity that could cover most of any shortfall if they cut off their
exports.

In addition to that, we have obviously looked at all the options that
we would have in that event, and one option would be the strategic
petroleum reserve. That's our insurance policy against disruptions in
oil supply. There we have 570 million barrels in the strategic
petroleum reserve, and other countries have strategic reserves that
total 650 million barrels. So if you do the math, you see that in the
highly unlikely event that Iraq would try to cut off its oil, which
would be detrimental to its position in the world from a whole variety
of points of view, but in the unlikely event they decided to do that,
and no other country was trying to step up to meet the shortfall, we'd
still be able to cover a year and a half of the cutoff from the
reserves that we've got.

So this is a situation we have looked at. But if you look at the
numbers, we can cover it, and we and others can provide for either
surge or reserves as necessary.

Q: Well, not just a cutoff. I mean, he's making the same statements
now that he did ten years ago about oil fields straddling the border.
Do you find that worrisome, and do you think it's more significant now
that he's making these statements, as opposed to people in his
government? He's not leaving it to ministers. He's saying it himself.

MR. BOUCHER: We have made clear on numerous occasions that we have a
policy that is designed to - and does, we think, succeed in containing
the threat that is posed by the regime of Saddam Hussein, while we
promote change of regime in Baghdad. We also want accountability for
Saddam's crimes against humanity, and I think you all know our
Ambassador, David Scheffer, made a speech on that on Monday.

Unfortunately, he and his regime persist in aggressive policies. They
are willing to threaten other nations in the world, as well as repress
Iraqis at home. He blames other nations for his own situation, rather
than admitting his own responsibility. Our red lines are clear. If
Iraq reconstitutes its weapons of mass destruction programs, threatens
its neighbors or US forces or moves against the Kurds, we have a
credible force in the region and we are prepared to act in an
appropriate time and place of our choosing.

Q: What I'm asking you is if you think it's more significant that he
is now making the statements about oil as opposed to lower-level
people.

MR. BOUCHER: I think it doesn't matter who makes such statements. The
fact is Iraq shouldn't be trying to threaten its neighbors, whether
it's Saddam Hussein or one of his ministers. We have a policy in place
that has contained him successfully for these years. We have a
credible force in place if he tries to do anything against his
neighbors. We have a credible force, and we are able to respond at a
time and place of our choosing.

So I'm not trying to hype this; I'm just saying that the facts are the
facts. We have been there, we are there, and we can continue to
contain in the way we have in the past. And we will.

Q: Is Saddam Hussein attempting, at present, to climb out of his box?
And is there a credible or increased threat - or a credible threat -
against Kuwait at the present time?

MR. BOUCHER: As far as how the military judges threats at any given
moment, I suppose the Pentagon can do that, if they have - what status
they are on. In terms of getting out of his box, he is in it. The
sanctions are there, the forces are there, the containment policy is
there. We have continued to work with other governments to make sure
that sanctions stay in place and are enforced.

We do know that Tariq Aziz was up in New York running around, trying
to convince people that the UN should somehow negotiate with him on
Resolution 1284. We don't think they should; 1284 remains in place,
and the only way for them to get out of the box is to comply with the
Resolution. As the Secretary said, it's like Alice in Wonderland. The
key is on the table. If they want to get out of the room, pick up the
key and open the door. And that's Resolution 1284.

Q: On the same subject. There are a number of countries that have been
pressing the US to ease the sanctions posture. Does the untapped oil
production capacity of Iraq lead to increased pressure on the US from
these countries, and give them sort of more of an argument, if you
will, to say, look, you know --

MR. BOUCHER: Our understanding is there is not much untapped oil
production from Iraq capacity, that they are pumping as much or more
than they ever did before the invasion of Kuwait.