The programme allows Baghdad to sell up to $5.265 billion worth of oil every six months to buy food, medicine and other humanitarian supplies to ease the impact of eight-year old UN sanctions on ordinary Iraqis. But Iraq, due to the state of its oil industry and the current low crude prices, is expected to raise less than $3 billion over the current six months, ending on May 24, according to a report from the UN office for the programme.

However, the amount of oil Iraq exported last week was the highest weekly figure since the programme began in December 1996.

Before the sanctions were imposed when Iraq invaded Kuwait in August 1990, Baghdad exported 3.2 million barrels per day.

Nevertheless, the value of the oil sunk to a new low, with the average price forIraqi oil exported last week amounting to $8.23 per barrel, UN officials said. Oil analysts say that if Iraq continues to ship oil at this relatively high volume it may irreparably damage its oil fields. They are in need of rehabilitation, including gas injections, to maintain quality of both Kirkuk and Basrah Light crude oil, the two crudes shipped in the oil-for-food programme. Eight contracts for the sale of oil were approved in the week from December 19-25 by the UN. This brings the number of approved contracts for the six month period to 58, for a total of 224.2 million. barrels of oil.