There is a "serious possibility" that Iraqi oil exports could be halted next week over Baghdad's demand that buyers pay in euros from November 1, the Middle East Economic Survey (MEES) reported Thursday.
The specialist newsletter said the United Nations had delayed deciding whether to approve Baghdad's instructions to its customers to pay for Iraqi oil in euros and no longer in US dollars.
Iraq informed the UN Secretary General Koffi Annan two weeks ago that invoices for its crude oil sales will be denominated in euros from November 1 and that payments into the Iraqi escrow account in New York should be made in euros.
The United Nations has controlled Iraq's oil exports under the oil-for-food program since 1996, allowing Baghdad to buy essentials in return for crude exports.
"Thus far the UN Sanctions Committee is continuing to discuss the issue and has not responded to the Iraqi letter," MEES said.
"The consultations at the UN are focused on the principle of the Iraqi decision and the mechanisms and steps necessary to implement it if that principle is approved.
The Sanctions Committee is not set to meet until Monday 30 October, according to MEES. In the absence of any decision, payments will continue to be made in dollars.
MEES added that the French bank BNP which controls the escrow account has not opened a euro account for Iraq pending instructions from the UN.
UN experts estimate that it would take two months to put in place a payment system in euros for Iraqi oil exports.
Iraq, which describes the dollar as a tool of US hegemony, made the move as part of its battle against the United States, which continues to bomb the country on an almost daily basis in the aftermath of the Gulf war -- NICOSIA (AFP)
© 2000 Al Bawaba (www.albawaba.com)
