Industrialised nations launched a concerted campaign on OPEC countries yesterday in a bid to drag the price of oil sharply lower, amid a push to expand global stockpiling.

The move at the International Energy Forum came amid fears of further oil price escalations if the United States led an offensive into Iraq, and if Iraqi leader Mr Saddam Hussein retaliated by launching an attack on other Arab countries.

"They're looking for $21 a barrel, it costs $12 a barrel to get it out of the ground so a $10 premium is considered reasonable," one source close to the delegates told AFP.

Oil is currently trading around $28 dollars a barrel, the high end of the $22-$28 price band targeted by the 11-member Organisation of Petroleum Exporting Countries (OPEC) after it opted last week to leave quotas unchanged with total production at 21.7 million barrels a day.

The forum was supposed to cover all aspects of global energy demand but the emphasis here has remained on a sharply lower oil price amid euphemisms of "harmonising relations between consumers and exporters".

Cheaper oil would provide a filip to flagging Western economies, particularly in Europe, the US and Canada ahead of the approaching winter in the northern hemisphere.

Another source said delegates were also mindful of the 1991 Gulf War when the price of crude shot through the $40 mark and caused a recession in the US which resulted in then president Mr George Bush being voted out of office.

However, the war premium was not seen as solely responsible for high prices and raising production was not seen as a viable option.

"Increasing production at the present time is not going to address that factor," Britain's Energy Minister Mr Brian Wilson said.

Instead industrialised countries want to see illegal excess capacity, which is widely seen as skewing oil prices, taken out of the market.

More than 1.5 million barrels of oil a day in production cheating by OPEC members, and more in illegal sales from Iraq, is believed to be in the international market.