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. Last Updated: 07/27/2016

UN Strikes Deal to Ease Oil Embargo on Iraq

UNITED NATIONS -- After months of protracted negotiations, Iraq and the United Nations signed an agreement Monday to let Saddam Hussein sell oil to buy food and medicine for its people.

UN spokesman Sylvana Foa said the "memorandum of understanding" of signed by Iraq's chief negotiator Abdul Amir al-Anbari and the UN chief legal officer, Hans Corell. Secretary-General Boutros Boutros-Ghali went immediately to brief the Security Council on details of the agreement.

"At last our efforts have been fruitful and we just signed the agreement," al-Anbari said after meeting with Boutros-Ghali.

Al-Anbari said he would leave New York later Monday.

Anbari said he expects Iraqi oil to start flowing in a month although Western diplomats said it could take six to eight weeks.

"What a good day this is. It's an excellent day for the people of Iraq," U.S. Ambassador Madeleine Albright said. She said the United States was satisfied with the reported deal.

An agreement would let Iraq sell $1 billion of oil every 90 days -- its first oil exports since the United Nations imposed sanctions on Baghdad to punish it for invading Kuwait in August 1990. The pact would be expected to reduce gasoline prices worldwide.

June crude oil futures fell 79 cents a barrel to $19.85 on the New York Mercantile Exchange shortly after reports of the agreement.

"I don't think that it will have a negative affect," said Kuwaiti Ambassador Mohammad Abulhasan. "The oil market will be able to absorb these 700,000 barrels."

UN and Iraqi negotiators met Sunday with Boutros-Ghali to review the text of a tentative agreement worked out last week.

Afterward, UN spokesman Ahmad Fawzi quoted al-Anbari as saying he expected instructions from his government within 24 hours.

Last year, the Security Council offered to let Iraq resume oil sales but stipulated that up to $150 million of the profits must be distributed by the United Nations to Iraq's Kurdish minority, which has been battling the government for decades.

That demand had been the major stumbling block to an accord. Iraq said the UN plan would threaten its national sovereignty. Sources close to the talks said the two sides had reached a tentative agreement on the distribution issue, including the status of UN monitors who would guarantee that the food and medicine were not just given to Saddam's supporters.

In Baghdad, Saddam presided over a meeting of Iraq's two highest councils Saturday night, apparently to discuss the UN offer. Security Council members have said they will not lift sanctions fully until Iraq complies with UN orders to dismantle its weapons of mass destruction.