"Now that Iraq is liberated, the United Nations should lift economic sanctions on that country," Bush said on Wednesday.

While House spokesman Scott McClellan later confirmed that Washington would table a new resolution to end the UN-administered "oil-for-food" programme "in the near future".

The prospect of resumed Iraqi oil exports is likely to increase pressure within OPEC -- the Organisation of Petroleum Exporting Countries -- for a production cut when ministers meet next Thursday.

Despite enduring differences between the five permanent members of the UN Security Council, French President Jacques Chirac, who led opposition to the war, said on Thursday he supported the lifting of sanctions -- in principle.

"The lifting of sanctions is an aim which we have supported for a long time," he said during an EU summit in Athens. "Now it is naturally for the UN to define the modalities for lifting the sanctions."

Meanwhile, thousands of oil workers were called upon to return to work at Iraq's northern oilfields around the town of Kirkuk from Saturday, with a view to restarting production within weeks.

Pierre Terzian, director of the French oil industry review Petrostrategies, said prospects for the lifting of sanctions appeared to have improved after Chirac telephoned Bush earlier in the week for the first direct contact between the two leaders in two months.

"It seems that a battle at the Security Council can now be ruled out," Terzian said. "If Chirac called Bush, it can only have been to say, 'Let's make peace.'"

Chirac's spokeswoman said after the telephone call that the French leader had told Bush of "France's willingness to act in a pragmatic way" over Iraq's postwar reconstruction.

If a new UN resolution were approved next week, Terzian said, the first barrels of Iraqi oil could hit the market as soon as early May.

Iraqi wells had not sustained significant damage in the war, he added. "Production can resume fairly rapidly. It would be a gradual pick-up, and could reach the pre-war capacity of 2.4 million barrels a day within about six weeks."

Iraqi exports are also held up by uncertainties over who legally owns Iraqi oil, and who should sign the "bills of loading" required with each consignment.

Turkey has been seeking clearance from the United Nations and Washington to sell 1.8 million tonnes of Iraqi oil currently filling storage facilities at its southern Ceyhan terminal.

The signs of a rapid resumption of Iraqi oil supplies follow warnings from several OPEC ministers that the global market is already oversupplied.

"Currently there is a surplus in the oil market, and if it is not controlled in the long term, oil prices will slide," Iranian Oil Minister Bijan Namdar Zanghaneh told reporters on the sidelines of an international energy conference in Tehran on Thursday.

"If the sanctions are lifted, in a year's time Iraq's oil production could reach 3.5 million barrels a day... resulting in medium- and long-term problems for the market."

Algerian Energy Minister Chakib Khelil and his Qatari counterpart Abdullah bin Hamad al-Attiyah -- who is also OPEC's current president -- have both suggested the cartel should decide to reduce production at next week's meeting.

Mehdi Varzi, a London-based oil analyst with Dresdner Kleinwort Wasserstein, said the issue of whether Iraq would remain within OPEC's quota system was likely to remain a source of uncertainty.

"OPEC politics have suddenly become more complicated beacuse for 12 years, they have known what to expect of Iraq -- now we're about to enter a new and different era in which at some stage OPEC must discuss Iraq re-entering into the quota system," said Varzi.

"It's too soon to discuss that yet but I think OPEC realizes that Iraq will try to raise production capacity as far as it can, when the time is right."

SPACE.WIRE