Blockade Runner

THE PERSIAN GULF: An oil embargo, and the chance to make money off it, makes strange bedfellows. Case in point: Former mortal enemies Iraq and Iran, now working together to smuggle oil out of Iraq in defiance of the UN ban. The U.S. Navy has been monitoring a fleet of Iraqi ships that they believe are loaded with diesel fuel that travel down Iran's coast and use the country's territorial waters, where U.S. ships can not go, as cover before offloading at ports in Iran and the United Arab Emirates. Twice in recent weeks, U.S. Navy warships have been threatened in international waters while intercepting illegal oil shipments from Iraq, and each incident has an Iranian connection, the Associated Press reported Tuesday. Vice Admiral Thomas Fargo, commander of the U.S. 5th Fleet, told AP that the incidents, combined with the smugglers' use of Iranian waters, indicate that the Iraqi oil ring is "centrally controlled within Iran." Iraq must sell the illicit oil on the cheap, but it desperately needs the infusion of cash, while Iran reaps large profits from the oil upon resale. The shipments fall outside the limited Iraqi oil sales approved by the United Nations to raise cash for food and medicine, and have actually increased in scale as Iraq began making approved exports, Fargo notes.