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CNN Live Today
Hussein Suspends Oil Exports
Aired April 08, 2002 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Angry words are flying in the Middle East today, as the West Bank death toll mounts. Israeli Prime Minister Ariel Sharon accuses Yasser Arafat of leading what he called a "regime of terror." In response, a Palestinian spokesperson says the Israeli leader's remarks signaled an end to the peace process. All this as Secretary of State Colin Powell slowly makes his way to the Holy Land, in an effort to halt that killing.
We will start with CNN's Jerrold Kessel with the latest from Jerusalem -- Jerrold.
JERROLD KESSEL, CNN CORRESPONDENT: Hi, Kyra. And even as this -- these battles continue to unfold in the West Bank and Mr. Sharon adamant that the Israel operation will continue despite the U.S. insisting that it should be winding down without delay, there is a real possibility of another front opening up, because again, for the sixth straight day, there has been fighting across the Lebanon-Israeli lines.
Hezbollah guerrillas in South Lebanon firing at Israeli positions in the area of the Israeli-occupied Golan Heights across from Lebanon, and this disputed area has produced Israeli response, some fierce Israeli artillery barrages in response to that Hezbollah shelling, and also bombardment from the air.
The sixth straight day, a volatile situation there, and more than a volatile situation in at least two of the West Bank cities, in Nablus and in Jenin where, as you said, Israelis are estimating they may have killed up to 100 Palestinian gunmen. Palestinian death toll in the refugee camp in Jenin not absolutely clear because they say they can't get to many of the bodies, but they are saying many of the people killed were civilians. The Israelis did report two of their own men killed earlier today in those fierce clashes in Jenin.
And in the Knesset, Israel's prime minister not only defiant, but literally seeming to take the line that while he has the initiative, he means to keep the initiative, and that, first and foremost, in respect to how long this operation to root out what the Israelis have called, "root out the sources of Palestinian terror" in the West Bank will continue. Mr. Sharon making plain in his address to the Knesset that it won't end one minute before the goal of the mission is completed.
(BEGIN VIDEO CLIP) ARIEL SHARON, PRIME MINISTER OF ISRAEL (through translator): The IDF will continue with the operation, as quickly as possible, until the mission is completed, until Arafat's terrorist infrastructure is disassembled and until the killers that are hiding in various places like in the Church of the Nativity in Bethlehem, until they are captured.
(END VIDEO CLIP)
KESSEL: And with Mr. Sharon adamant that Yasser Arafat is the head of a regime of terror, indicating he has no business being dealt with, even negotiations or even, he implied, in trying to work out a cease fire. The Palestinians are taking up on that charging, that Mr. Sharon, by the way he was speaking today, was literally trying to shoot down the Powell mission even before it had gotten underway.
(BEGIN VIDEO CLIP)
SAEB ERAKAT: I think it is obvious today that the man's end game all along the way was to dismantle the Palestinians Authority, dismantle the peace process, to resume occupation, and I think the Israel people must understand that they need responsible leaders, they need people who can stop this madness.
(END VIDEO CLIP)
KESSEL: In the wake of what you could see as a path-blazing Sharon address to the Knesset, one big question of how much in, if anything indeed, in the Sharon vision as he outlined it, was there enough for the U.S. to build on, or would it want to build on that.
Well, in the last short while, we've heard from Washington that there is to be another meeting later today between the special U.S. envoy, General Anthony Zinni with Mr. Sharon here. The word coming out of Washington that the U.S. will be pressing for that operation in the West Bank to wind up now. We haven't had confirmation yet, that is interesting, from the Israeli side, that there will be such a meeting this evening between Mr. Zinni and Prime Minister Sharon -- Kyra.
PHILLIPS: Jerrold Kessel, live from Jerusalem. Thank you.
Well, with Colin Powell launching his peace mission, the Bush administration finds itself deeply involved in the Middle East crisis. For the White House view, we turn to CNN's Major Garrett, who is traveling with the president today in Knoxville, Tennessee -- hi, Major.
MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Good afternoon to you, Kyra.
President here in Knoxville to talk about community service and its application in the Homeland efforts against terrorism, but that message entirely overshadowed by all the events in the Middle East, and Ari Fleischer, the White House press secretary, briefed reporters aboard Air Force One traveling from Washington to Knoxville about that very meeting that the President's personal envoy, Anthony Zinni will have with the Israeli prime minister, Ariel Sharon. Let me read to you a couple of quotes from Ari Fleischer that put a very definite and unambiguous tone to the White House's message to the Israeli government about when it should withdraw from the occupied territories.
Ari Fleischer telling reporters -- quote -- "General Zinni will meet with Prime Minister Sharon later today, and he will deliver the message that the president meant it. They need to begin to withdraw now. This is a serious message from the president. He meant what he said, and he expects Israel to act."
The White House privately increasingly frustrated with the obdurance it has encountered from the Israeli government. It has has tried to walk a fine line, Kyra, all -- ever since the Passover massacre set in motion Israeli Defense Force's activities in the occupied territories, activities the Israel government said are determined to root out the terrorist infrastructure.
Generally speaking, the White House was sympathetic to that initial activity, those initial military incursions, but as they have drawn on, as they have gone on, lasted longer, taken more Palestinian lives, inflicted more innocent casualties among Palestinians, the White House has tried to say listen, for your own best interest, short-term and long-term, Israeli government, you must begin to withdraw those troops, begin to pull them back, so there can be some hope for a definite cease-fire talk, at least, and possibly a cease- fire achieved during Secretary of State Colin Powell's mission to the region, those hopes, though, are very much more complicated if, in fact, Israel defies the White House and continues the operation on the ground in the occupied territories -- Kyra.
PHILLIPS: Major, I don't mean to be a cynic, but I have to ask: what are the chances that Colin Powell's trip could be a bust, and if so, what is the next move?
GARRETT: Well, Kyra, if you would be a cynic, you would not be alone, not only in Washington, but also in the region. And there is a reason to be somewhat skeptical about this entire interaction between the White House and the Israeli government.
It is worth pointing out, when the President made his statement last Thursday from the Rose Garden announcing Colin Powell's mission to the region, the White House had sort of cleared its message with the Israeli government before hand, shared the sum total of what he was going to say, the president, that is, about Secretary of State Powell's mission.
So, the Israeli government has been well aware of the White House's interest in having it withdraw from occupied territories as early as Thursday, yet nothing has happened.
As far as Secretary of State Powell's mission to the region, well, this makes it more complicated. As to what he believed he can achieve, he said on the Sunday talk shows yesterday he doesn't believe he will leave with a peace deal. He said he may not even leave with a cease-fire. It would be very hard indeed for any White House, this or any other, to describe any mission that doesn't achieve at least a partial cease-fire a success, so very much a lot of work ahead for the secretary of state once he gets there -- Kyra.
PHILLIPS: Major, a lot of talk about the crisis in the Middle East and how it is affecting U.S. with regard to its economy, the stock market, prices of oil, I am curious, after Saddam Hussein made this move to not allow oil out of Iraq, what is reaction from the White House with regard to this?
GARRETT: It is actually multilayered. On one level, it says here again, here is Saddam Hussein inflicting pain on his own people by not selling oil on the open markets, which makes it more difficult for him, if he chose to, to administer the profits from that oil to address the needs of his own citizens. Issue number two is the Senate debating an energy policy.
This week, the White House is looking for a vote to pass that this week. What the White House says is this underscores the need for a national energy policy that moves more toward domestic production of oil, because such moves by Iraq and other nations potentially destabilize the flow of oil to the United States. Therefore, there needs to be more domestic production. That is the other angle.
Thirdly, the White House is generally concerned about the fluctuation in oil prices because, of course, they are reflected at the gas pump. Higher gasoline prices could undermine what appears to promising economic growth, although the White House does not believe that is a long-term problem, but it understands that volatility in the Middle East can affect oil markets, at least as far futures are concerned, but they want also to stabilize the region as much as they can, stabilize oil markets, because that has very much to do with the future growth of the U.S. economy -- Kyra.
PHILLIPS: Absolutely. Our Major Garrett traveling with the president. Thanks, Major.
Well, as we mentioned, the price of oil futures are rising today after Saddam Hussein announced a one-month stoppage of Iraqi oil exports. He announced the move as a show of support for the Palestinians.
CNN's Jane Arraf is in Baghdad to try to explain what the Iraqi leader is up to -- Jane.
JANE ARRAF, CNN CORRESPONDENT: Well, Kyra, the oil ministry says that as of now, Iraqi oil has actually spotted flowing to the rest of the world. That happened -- turning off taps happened just as President Saddam Hussein announced on television that he was immediately cutting the exports.
(BEGIN VIDEO CLIP)
SADDAM HUSSEIN, PRESIDENT OF IRAQ (through translator): The Revolution Command Counsel, the Iraqi leadership of the Ba'ath Arab Socialist Party, and the cabinet in their meeting on the eighth of April, 2002, declare in name of the faithful, honest, mujahid noble Iraqi people, completely stopping oil exporting starting from this afternoon on April 8, through the pipelines going to the Turkish port of the Mediterranean and our ports in Basra for the period of 30 days.
(BEGIN VIDEO CLIP)
ARRAF: Now he says he will resume oil exports sooner if Israel withdraws from the occupied Palestinian territories. Now, this affects about 2 million barrels a day, most of it going to the United States, which is exactly the point.
And just in case there was any ambiguity, the president said in the statement that this was a move that was aimed at Israel and at the United States, a move to pressure Israel to withdraw from those territories. It doesn't hurt that it also strengthens the Iraqi president's own popularity. His has been aligning himself with the Palestinians, and with what he calls the struggle to liberate Palestine and the Iraqi government has organized demonstrations throughout Baghdad today in support of the move.
Iraqis weren't actually asked about the move, first of all, but the important thing to note is that this comes out of the oil for food program, this is money that would be spend on humanitarian supplies supervised by the U.N., and a month's supply of money that Iraq won't have for those supplies -- Kyra.
PHILLIPS: CNN's Jane Arraf in Baghdad, thank you so much.
Well, joining us now to talk more about this, from Washington, oil analyst Karen Matusic, editor of "Oil Daily." Karen, good to see you.
KAREN MATUSIC, EDITOR, "OIL DAILY": Hello, good to see you.
PHILLIPS: Well, let's talk about the short-term predicts here.
MATUSIC: Well, I think immediately you are seeing a reaction in the market already. Oil over a dollar a barrel up. There has been talk that it could spike as high as $30 a barrel if there isn't a replacement -- barrels coming this way any time soon. It is dove tailing at the same time with an outright strike in Venezuela that is cutting off potentially 1.7 million barrels a day of imports to United States as well.
PHILLIPS: Well, let's talk about the immediate impact on the United States. Is it possible that -- we don't get all our oil from Iraq. Isn't it possible that Saudi Arabia could fulfill all the needs in the U.S., and not have to really worry about Iraq?
MATUSIC: Absolutely. What -- OPEC is sitting on about 5 million barrels of unused capacity that they have been cutting off since January of last year. I don't know how soon that oil will get here, and of course, futures markets always jump on any news story, even last week when the intifada really doesn't impact on oil exports at all, but they immediately went to six month highs. PHILLIPS: Well, how does OPEC make its decision whether to release that oil or not? How serious does it have to get? What are the factors involved?
MATUSIC: Well already, they were a bit worried about this impact on sort of nascent U.S. economic recovery, and the prices were already at six month highs, and sort of over that sort of uncomfortable level that economists might like to see to help the economic recovery along. Ali Rodriguez, who is the OPEC secretary general, has said today that he will be speaking with OPEC ministers tomorrow, so they can make a decision immediately on the telephone.
PHILLIPS: Now, what are your thoughts about other Arab countries joining in and supporting Saddam Hussein, because obviously, that would create an even bigger impact?
MATUSIC: Yes. I don't think there will be absolutely any support for him. I mean, already you are seeing Libya saying, yes they will support ti if all the other Arab and Islamic countries will go along with that. Iran is saying yes, it is a good idea, but we want to see everyone going along with that, and I am sure they would want to see Saudi Arabia, and Saudi Arabia has said there is no chance that they will use oil as a political weapon.
PHILLIPS: Karen Matusic, editor of "Oil Daily" Thank you so much.
MATUSIC: Thank you. Thank you.
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