Iraq Offers Cheap Oil in Bid to Woo Buyers

Its oil exports frozen by a U.N. embargo, Iraq today tried to woo customers by offering cheap oil and pledging not to touch the money until the Persian Gulf crisis is over.

Oil Minister Issam Abdul-Rahim Chalabi, in a statement carried by the official news agency INA, said Iraq would sell its oil to any buyer at $21 a barrel.

“Iraq is fully prepared to sell its oil to states and companies who want to buy, including the United States . . . and the selling price will be on the basis of $21 in line with OPEC’s decision,” he added.

But Chalabi said Iraq did not seek immediate access to the money.

The announcement appeared to be a sign that Iraq was feeling the pinch of the U.N.-ordered embargo on trade, which is being enforced by a naval blockade, and seeking to entice nations into abandoning the alliance arrayed against it.

Iraq already has offered to give oil free of charge to Third World countries, but there have been no reports of any takers.

OPEC set the $21-a-barrel price at its last meeting before the Aug. 2 Iraqi invasion of Kuwait. Since then oil prices have soared.

Chalabi said President Saddam Hussein had ordered the offer of oil at $21 “in view of his appreciation of Iraq’s humanitarian responsibility and role in all circumstances toward humanity and the international community.”

When the Organization of Petroleum Exporting Countries last fixed its oil price, $21 represented a $3-a-barrel increase and the rise was seen as success for Iraqi efforts to drive up prices in a sluggish market.

Since then, the invasion of Kuwait has pushed oil prices to more than $40 a barrel at times, although the embargo has prevented Iraq from benefiting.

“By this announcement, we want to participate in reducing the prices of oil to the consumer in the world and to expose the game of politicians colluding with monopolist oil companies and speculators,” Chalabi said. “We also want to help in restraining the oil sheiks who have benefited from the crisis and set loose their lust for wealth.”