Paris, Monday, October 30, 2000 Iraq Says Its Oil Will Be Priced in Euros This Week

Compiled by Our Staff From Dispatches

BAGHDAD - Iraq, OPEC's fourth-largest producer, will price its oil exports in euros instead of dollars starting Wednesday even though the move has not been approved by the United Nations, the country's oil minister said Sunday. France, Russia and China, all permanent members of the UN Security Council ''support Iraq's request,'' said the oil minister, Amir Mohammed Rasheed, according to the official Iraqi press agency, INA. Iraq said in September that it planned to switch to the euro because the dollar was the currency of an ''enemy state.''

There is a ''serious possibility'' that Iraq, which accounts for about 3 percent of world oil output, could suspend oil exports because of a delay in approving the request, the Middle East Economic Survey said last week. Iraq's exports are regulated by the UN under sanctions imposed after Iraq invaded Kuwait in 1990, and the country does not participate in the Organization of Petroleum Exporting Countries' output quotas.

The UN informed Iraq last week that it needed more time to study the cost of making the change. A report on changing the currency in which Iraq is paid for its oil will be taken up in New York on Monday by the UN sanctions committee, which is made up of officials from the 15 members of the Security Council, including the United States.

The U.S. State Department has said that it is not concerned about whether oil payments are made in euros or dollars, only that the oil-for-food program continue to meet its objective of providing the Iraqi people with needed food and medicine.

Iraq also wants to convert to euros about $10.6 billion sitting in an escrow account at BNP Paribas SA in New York. That could potentially have a greater effect on propping up the euro than the coordinated intervention of Sept. 22, when central banks spent billion of dollars in support of the European single currency.

http://www.iht.com/IHT/TODAY/MON/FIN/oil.2.html

-- Martin Thompson (mthom1927@aol.com), October 29, 2000