IRAQ has started to export oil outside the United Nations sanctions regime for the first time in 13 years.

Hundreds of tankers began on Monday to transport millions of litres of fuel oil from the Daura refinery in Baghdad across the desert to Jordan.

Under the UN sanctions, which were in force from the Gulf War in 1991 until last Thursday, Iraq was allowed to export oil only in return for food or medical supplies. The exports to Jordan, however, are being used to fund imports of petrol for motor vehicles to help to relieve severe domestic shortages.

“We started selling fuel oil to Jordan yesterday,” Dathar Yehia al-Khashab, director-general of the Daura refinery, said. “We are selling two to three million litres of fuel oil daily to Jordan. You can say it is the first oil exports since sanctions were lifted.” Iraq has a surplus of fuel oil, a heavy-duty oil that can be used in power stations.

Iraq has two other refineries, but neither is able to export at present. The Baijy refinery near the Kirkuk oilfields in the north is struggling because of looting and electricity shortages, and the oil pipelines through Turkey and Syria are closed. The Basra refinery in the south is operating severely below capacity.

Exports are expected to resume in about two weeks from al-Faw oil terminal, which loads oil on to supertankers. The terminal was captured by British troops in the first few days of the conflict and is virtually unscathed. Pipelines taking oil to the terminal were damaged, however, and final repairs were being carried out at the weekend.

Abdul Razzak, the director of all Iraq’s ports, told The Times: “The oil ports are all ready. The oil terminals are all ready. We don’t need to dredge it because the depth is very good and the equipment was not affected by the war.”

Iraq’s production of crude oil is also very low, but it is expected to double within a month after repairs are made. The country was producing 2.5 million barrels of oil a day before the war, but the total is now 700,000.

Thamir al-Ghadhban, the Director of the Oil Ministry and de facto Oil Minister, said that production should increase sharply. “It will take a few weeks, but we should be producing 1.3 to 1.5 million barrels per day by the middle of next month. We hope in two weeks we will be in the market,” he said. It is expected to take three months to return to prewar levels of production.

The Oil Ministry is operating more normally than other Iraqi ministries. It was the first to be occupied by US troops when they entered Baghdad. It was not damaged by bombing or looting.

The reopening of al-Faw terminal will mark the full re-entry of Iraq into world oil markets, which could have a profound effect not just on the Iraqi economy but also the world economy. Iraq has the second-largest oil reserves in the world, after Saudi Arabia, and the UN resolution last week gave the United States and Britain wide-ranging powers to run Iraq and its oil industry.

Petrol shortages remain acute in Iraq, with queues at petrol stations lasting for days in some parts of the country. The coalition administration hopes that restarting oil production will ease domestic shortages and that exports will provide revenues for rebuilding.

Mr al-Khashab said that the lifting of sanctions would enable him to modernise the Daura refinery, which was built in 1955. He is signing contracts with Western companies to rebuild the refinery to increase efficiency and to produce higher quality products, such as unleaded petrol.

Iraq has a second export terminal, Khor al-Amaya, but it was destroyed in the first Gulf War and has not been fully repaired. Umm Qasr, Iraq’s main cargo port, is still capable of handling only limited imports of emergency aid.

Sadiq Ressan, the general manager of the port, said that Iraq was not yet open for business: “We are in the stage of reconstruction, and not ready to receive ships. We are rebuilding the port, repairing all the equipment, dredging the channels, getting tugboats. There are rocks in the port since the last war that must be removed.”

Paul Bremer, the US civil administrator, said last week that the few ships bringing aid that were docked at the port were evidence that he was getting Iraq back to work again. Mr Ressan said that they were an exception: “It’s not the beginning of the proper working of the port. It is only an emergency. I can’t tell you when the port will be working again.”

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