The halt in oil exports from embattled Iran and Iraq has stranded Somalia without fuel to transport food to thousands of hungry refugees and sent Brazil and India scrambling with scarce hard-currency reserves to buy petroleum from alternative sources before their stocks run dry.
The drama in Somalia and the push by Brazil and India to secure new suppliers away from the war zone are the most pressing cases among more than 15 of the world's poorer countries that depended on Iraq or Iran -- sometimes both -- for a large portion of their oil imports, often at concessionary rates. b
It was in large measure in response to pleas from these hard-hit nations that Saudi Arabia announced yesterday that it is willing to increase production along with other members of the Organization of Petroleum Exporting Countries to offset the daily shortfall of approximately 3.7 million barrels caused by the 12-day-old Persian Gulf war.
Even with a Saudi-led production rise now, however, these consumers seem likely to end up paying significantly higher prices for their petroleum because of the war. Industry and government experts point out that the poorer countries have smaller stocks to fall back on and tighter foreign currency reserves to finance purchses on the open market, where prices are running $4 to $5 above the $32 a barrel OPEC reference level.
In addition, much of their imported oil was obtained on highly advantageous concessionary terms, particularly from the Iraqi government, which offered low prices and soft loans as a form of foreign aid to a number of developing countries.
"The Iraqis sold to all the down-and-outers of the world," said one U.S. official tracking the consequences of the gulf war.
Turgut Ozal, Turkey's deputy prime minister for economic policy, said yesterday that the Iraqi pipeline through Turkey has been repaired after sabotage knocked it out, but that bombing damage to oil installations at Kirkuk and Iraqi pumping stations is still holding up a resumption of pumping by the Iraqi National Oil Co.
The disruption of Iranian and Iraqi oil shipments also has cut drastically into supplies to wealthy industrial nations such as France, Japan and Italy, U.S. government statistics show. But these countries are considered more able to respond to the crisis by drawing on stocks or paying higher spot market prices to meet their needs.
"All of these [other] countries are in bad shape beginning the end of November," the official said.
Somalia, which received nearly all its 10,000 barrels a day from Iraq, is already in bad shape. Diplomatic and news reports from Mogadishu, the capital, say the government of President Mohammad Siad Barre has only about three weeks' fuel supplies left for trucks ferrying food to the country's 32 refugee camps. Aid officials there are trying to arrange for diversion of an oil tanker at sea to nourish Somalia's refinery in time and U.S. officials in Washington are considering emergency shipments of processed fuel to keep relief vehicles running.
Washington Post special correspondent Victoria Brittain reported from neighboring Kenya that camps holding as many as 60,000 refugees already have exhausted their food stocks and the Somalia Refuge Commission is having trouble getting trucks to move them new supplies because of a diesel fuel shortage.
Somalia, an impoverished country on the Horn of Africa, has been suffering for some time from the accumulation of ethnic Somali refugees fleeing fighting in Ethiopia's disputed Ogaden region. The added crisis caused by Iraq's oil export halt comes at a particularly significant moment, however, because Washington and Mogadishu recently announced agreement on a deal permitting U.S. use of air and port facilities in Mogadishu and the Somali port of Berbera in return for U.S. military aid and increased economic assistance.
Also among the hardest-hit nations is India, which obtained about 100,000 barrels a day from Iran and another 120,000 barrels a day from Iraq -- about two-thirds of the country's import needs. As was the case with many Iraqi customers, India received interest-free loans to cover about a third of it purchases from Baghdad.
Indian supplies also have been tightened by unrest in the northeastern state of Assam, the chief source of India's domestic production. Because of the turmoil there, U.S. analysts estimate, India lost about 28 million barrels of the 102 million barrels a year it normally produces at home.
Although stocks are reported to be relatively comfortable for the coming weeks, India has been in the forefront of efforts by poorer countries to line up increased availability from Saudi Arabia and like-minded OPEC members such as Venezuela and the United Arab Emirates. There were reports that Indian officials also are considering an increase in the amount of oil purchased from the Soviet Union, estimated by the Inidan Embassy here at 12 million barrles a year for the last several years.
Brazil, which got half its million barrles a day of imports from Iraq at advantageous terms, announced yesterday it will buy 24,000 barrels a day from the Soviet Union at $33.75 a barrel to help offset the cutoff from its gulf suppliers. Foreign Minister Ramiro Saraiva Guerreiro said earlier this week that Saudi Arabia, Venezeula, Mexico and Nigeria also were possible alternative sources.
Brazilian diplomatic sources in Washington said the Soviet Union was nothing new for Brazil, which they said had for the last decade been buying Soviet oil occasionally according to market conditions. Some contracts have reached as high as 50,000 barrels a day, they said, or twice as much as the current deal.
Ozal, in a conversation with Washington Post editors, said Turkey also counted on Iraq for 35 percent of its oil and on Iran for another 15 percent, leading Ankara to join the list of those approaching Saudi Arabia for increased supplies.
"If the Saudis don't understand our problem and if the war continues another two or three months, as I fear it could, then we will have a very serious problem," he said.
Also high on a 17-nation list of oil-short countries being compiled by U.S. officials are Mozambique, Madagascar, Sri Lanka and Bangladesh. The two South Asian nations have stocks to give them several weeks' breathing room, the officials said, but the two African countries depended heavily on concessionary government-to-government purchases from Iraq for their refineries and are looking for immediate resupply.