BAGHDAD, 13 May 2003 — Iraq sits on the second-largest oil reserves in the world and its storage tanks are full to bursting — yet now it is being forced to import from the same neighbors it used to supply.

The broken-down industry’s infrastructure, hammered by three wars in 23 years and desperate for spare parts after more than a decade of UN sanctions, is at the moment incapable even of meeting Iraq’s domestic needs. “The Iraqis should be the last people on the face of the earth to have to queue for gasoline,” said Qahtan Haidar, a taxi driver waiting to fill his car in one of the many interminable lines that now clog the Baghdad streets.

Once an OPEC powerhouse, Iraq used to be one of the world’s main sources of oil, gas and refined products. Jordan, which received 100 percent of its petroleum imports from Iraq before the war, began shipping gasoline here last week. Tiny Kuwait, which Saddam Hussein invaded in 1990, did the same. Trucks are also rolling south from Turkey, which used to receive huge quantities of refined products smuggled from Iraq in violation of the UN sanctions imposed just after the fateful invasion.

The United States now desperately wants those sanctions lifted, not least because Iraq will have to start exporting oil to pay for the mammoth task of rebuilding after the US-led coalition’s war to get rid of Saddam. Iraq’s crude production is currently at around 200,000 barrels per day (bpd), or eight percent of its pre-war level of 2.5 million bpd. Meanwhile output at the three main refineries, where crude is turned into gas for cars and fuel oil to run power plants, is 180,000 bpd, leaving Iraqis with less than a third of their gas and meeting less than half of their electricity demand.

Oil experts say Iraq’s oil production is caught in a complex web of technical and political problems. “The main technical problem is electricity,” said Ruba Husari from the Energy Intelligence Group, a New York specialist publisher. The lack of electricity is preventing the refineries from increasing output, and power plants are not able to increase their flow because of damage done to the grid during the war.

The main political problem is that there is no government in Iraq, and thus no UN-approved authority to sign the contracts that would allow the oil already waiting in nearly full storage facilities to be exported. While the sanctions remain in place, so does the oil. Gary Vogler, the US-appointed advisor to the relaunched Oil Ministry, said Iraq is now getting around 100 gasoline trucks a day from Kuwait, Turkey and Jordan, and that they are pushing to double that number as soon as possible.

Liquid propane gas (LPG), mainly used for cooking, is also being brought in from Kuwait. But like so much else in postwar Iraq, that, too, poses a problem: nobody knows how to pay for the imports.