The tanker headed for America to sell the shipment at a price pegged to West Texas crude.

It stopped off in Omisalj, a Croatian port on the island of Krk and the oil was put in a storage facility owned by the Croatian petroleum company INA. The diversion has since become a matter of dispute between the UN and the cargo’s owner, a Swiss commodities firm called Glencore.

The UN said Croatia was the final destination for the shipment and asked Glencore to pay it pegged to European rather than American prices. The difference was $3m and Glencore UK, based in Mayfair, London, sent the UN a cheque to cover that amount. Glencore said last week that Croatia was never meant to be the oil’s final destination. It said there was a misunderstanding due to the UN’s fuzzy rules on Iraq oil-for-food shipments.

All this is of more than academic interest to the City. Next month the UN will report on companies buying oil from Saddam Hussein’s government. The odds are it will mention Glencore. This will not only focus attention on Glencore, but also drag the FTSE 100 mining company Xstrata into the scandal, because Glencore controls 40% of it.

In financial circles, Glencore is known for its success. The company earned $1.5 billion (£845m) last year, putting it on a par with the City’s largest hedge funds.

Glencore is also known as the company founded by Marc Rich, the commodities trader who fled to Switzerland from the US after being charged for embargo-busting in Iran following the Khomeini revolution. Four years ago, Rich was pardoned by President Bill Clinton on Clinton’s last day in the White House.

Glencore has been named in connection with irregularities in the oil-for-food programme by the CIA. The US spy agency obtained a register of firms that Iraq’s State Oil Marketing Organisation (Somo) said had paid illegal surcharges on oil-for-food deals.

“According to Somo records, one of the most active purchasers of Iraqi crude was a Swiss-based company named Glencore,” the CIA noted. “It paid $3,222,780 in illegal surcharges during the period of the programme.” A CIA spokeswoman said last week that the agency had come to no conclusion on the veracity of Somo records.

The company, for its part, said: “Glencore never paid any surcharges or made any improper payments to Somo or to any other branch of the Iraqi government, or to Iraqi officials.”

New light may be shed next month, when UN investigators, led by former US Federal Reserve Bank chairman Paul Volcker, review Glencore and its activities in Iraq.

On September 7, the Volcker committee published the first part of its report, criticising UN secretary-general Kofi Annan for allowing the oil-for-food programme to become corrupt.

As Saddam’s regime offered discounts from the official price to the 600 companies authorised to buy its crude, it separately collected surcharges of up to 50 cents a barrel on shipments.

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