War In The Balkans: Fuel Supplies - Nato states supply oil to Serbia

THE YUGOSLAV state oil company is still taking direct deliveries of refined products from European Union countries including Britain.

As Nato claimed success in destroying 25 per cent of Yugoslavia's fuel- storage capacity and the EU assured the world it was rushing through an embargo, agents at the Montenegrin port of Bar said yesterday that Jugopetrol, the Serbian oil company, had been receiving huge deliveries of refined fuel oil and diesel, both vital for keeping Slobodan Milosevic's military on the rails.

Oil-refining and storage facilities have been key targets in Nato's bombing campaign but the interests of big business, particularly in Italy and Greece, both of which belong to Nato, mean Belgrade is still a valued customer. Italy and Greece have been most reluctant to agree to the EU embargo, which for "legal" reasons will only take effect from the middle of next week.

A Piraeus-based trader was quoted in the Financial Times as saying the embargo would probably be ineffective. "Be sure, oil will still get to Yugoslavia whatever the EU decides. The profits will be immense. And the way the Greeks feel about what's happening to the Serbs they'll make sure they send it."

While Italy and Greece are the main suppliers, shipments have also been coming from Britain.

Texaco said that 10 days ago it delivered 65,000 barrels of petrol to Yugoslavia from a British refinery aboard a vessel chartered from a Greek company. More cargoes have been arriving in recent days, according to shipping agents.

A French ship, chartered by Jugopetrol in Slovenia, was reported to have arrived two days ago carrying 2,600 tons of diesel. Larger vessels carrying fuel oil or diesel destined for the Serbian company have also been seen docking at Bar in recent days, although some of this fuel may have been destined for consumption in Montenegro.

The EU ban is intended to hit supplies of oil to Montenegro as well as Serbia but one potential loophole could still be exploited by oil companies.

It would exempt oil destined for helping displaced people within Yugoslavia in projects monitored by the International Red Cross and UN refugee agency. Shipments already on their way to Yugoslavia would also fall clear of the embargo. Each member-state is expected to determine individually the sanctions to be imposed on anyone breaking the ban.

Madeleine Albright, US Secretary of State, yesterday asked the frontline states in the Balkans to join the embargo. The foreign ministers of Albania, Bosnia, Bulgaria, Croatia, Hungary, Macedonia, Romania and Slovenia were urged to "join Nato and the EU in doing all we can to stop petroleum products from reaching Belgrade's armed forces".

Experts say that without a UN Security Council resolution there is little the allies can do to prevent Russia, China or Libya trading with Belgrade.

Hungary shipped 8,000 tons of Russian oil at the beginning of April, a paper claimed. Officials earlier said there had been no shipments since the bombing began but on Wednesday a minister admitted "small amounts" may have gone anyway.