As the George W. Bush administration masses troops in the Persian Gulf in preparation for a war to topple Iraqi President Saddam Hussein, US refineries are the biggest customers for the crude oil Iraq produces.
Shipments to the US more than tripled from September to January, according to the Commerce Department. Iraq supplied 17.1 million barrels in January, 6.4 percent of total US oil imports and up from 5.15 million four months earlier.
The jump in imports came as an illegal surcharge that benefited the Iraqi government was dropped and as refiners sought alternatives for crude from Venezuela, where a strike crippled oil production.
"The US is by far the biggest customer of Iraqi oil," said Eric Kreil, an analyst at the Energy Department's Energy Information Administration. "Iraqi oil is a pretty good substitute for the Venezuelan grades that were cut off."
Iraq pumps about 3 percent of the world's oil and is the third-largest producer in the Middle East. The prospect of a war in Iraq has helped boost the US benchmark oil price by 39 percent since November.
Iraq is allowed to export oil under an exception to UN-imposed sanctions imposed after the country's 1990 invasion of Kuwait. The UN must approve Iraq's oil sales, and proceeds are designated to pay for food, medicine and oil-industry equipment.
The surcharge, which helped the government skirt UN control of oil revenue, stopped toward the end of last year, said George Beranek, an analyst with Petroleum Finance Co in Washington. That made Iraqi crude competitive with oil from other sources.
US imports of Iraqi oil rose by 64 percent in November from October, after falling to a four-year low in September. They continued to climb in December and January, according to Commerce Department figures released yesterday.
The global oil market doesn't discriminate against a country's oil as long as it's priced competitively, said Youseff Ibrahim, editor in chief at Energy Intelligence Group Inc in New York.
"It's not a deliberate decision by the US or anyone" that made the US the largest user of Iraqi oil, he said.
The US doesn't import oil from Iran and Libya, two other states that the government has identified as supporters of terrorism.
In 1986, the Ronald Reagan administration banned US companies from doing business in Libya; UN sanctions against the country were imposed in 1992.
The US has imported little Iranian oil since 1979, according to Lowell Feld, an international oil-markets analyst at the Energy Department.
"US sanctions have waxed and waned since then," he said.
"The last time the US imported Iranian oil was in 1991," when the government allowed limited shipments, he said.
Bush said in April that he would only support lifting US sanctions against Libya and Iran if they acknowledged past acts of state-sponsored terrorism.
About two-thirds of the oil Iraq exported in February went to the Americas, and half of that went to the US, according to an analysis by Energy Intelligence Group. That suggests the pace of imports the Commerce Department reported for January continued last month.
US refiners have been buying Iraqi oil as an alternative to supplies from Venezuela, which were cut off when workers went on strike in early December. Venezuela met 10 percent of US oil needs before the strike began. Iraq's Basrah and Kirkuk grades are reasonable substitutes for the crude produced in Venezuela, which is a high-sulfur or "sour" grade.
"Iraq got an additional boost from Venezuela," Beranek said. "US refiners took any bit of crude they could get, particularly sour crudes."
"There was a certain stigma associated with taking Iraqi crude because it was assumed that you paid a surcharge" that benefited Hussein, Beranek said.
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