Iraq to accept dollars for oil By FT.com staff Published: October 30 2000 09:58GMT | Last Updated: October 30 2000 14:14GMT

Iraq announced it is to start using euros but backed down from its refusal to accept dollar payment for crude oil exports from November 1, declining to say how long the dollar would be acceptable.

An official from Somo, Iraq's state oil company, said dollar payments would be accepted for several cargoes loading in the first few days of November despite threatening earlier this month to cut off 5 per cent of the world's oil exports unless customers paid in euros or currencies other than the dollar, referring to it as the currency of an 'enemy state'.

Oil industry sources viewed the delay in Iraq's demands for euro payment as an admission by Somo that it was impossible to put a euro mechanism in place by the November deadline, but did not expect the climbdown to be permanent.

Iraq's demands have so far attracted no official criticism from the US government and on Monday the United Nations Iraqi sanctions committee is expected to approve the switch to euro payments although the UN has requested Iraq to postpone the deadline.

Oil prices remained soft as traders waited for the UN's decision and braced themselves for Opec's fourth increase in oil supplies this year in an attempt to reduce soaring prices. US crude was down 13 cents early on Monday at $32.61 a barrel.

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-- Martin Thompson (mthom1927@aol.com), October 30, 2000