Saudi Arabia moved today to assure global markets rattled by Iraq's suspension of oil exports that it will not allow a shortage of crude.
Oil minister Mr Ali al-Naimi was quoted in Saudi newspapers saying Saudi Arabia, the world's biggest oil producer, would ensure global supplies.
Oil prices climbed sharply yesterday after Iraqi president Saddam Hussein announced Baghdad was suspending oil exports for a month to protest at Israel's incursion into Palestinian areas in the West Bank.
The Saudi newspapers quoted Mr al-Naimi as saying: "Whatever may be said, we have proven in many previous crises that Saudi Arabia and OPEC are reliable and stable sources of oil supplies".
Iraqi oil minister Mr Amir Muhammad al-Rasheed said yesterday Baghdad had asked fellow OPEC member countries to join its campaign, or at least not to raise production.
But the world energy watchdog, the International Energy Agency, said there was no need for panic. "It's regrettable but not a huge volume," said IEA executive director Mr Robert Priddle.
In the event of an emergency, the IEA can order a release of reserves from stockpiles held among its industrialised 25 member countries.
Baghdad's crude accounts for about 4 per cent of international oil trade, pumping about 10 per cent of OPEC's 25 million barrels daily. Other OPEC producers can easily cover the Iraqi outage if prices start to run out of control.