The head of OPEC, the group of major oil exporters, says recent crude price increases are to blame on market fears caused by the crisis in Iraq but not on a drop in output.
OPEC Secretary General Abdullah Al-Badry said Tuesday that Iraq is "still producing as normal," with 95 per cent of its capacity in the country's south being unaffected by the violence.
The price for a barrel of Brent crude, the key international benchmark, has risen from a stable level of $110 held over the past four years to about $115 following the takeover of some parts of Iraq by Sunni insurgents.
Al-Badry says prices are not rising because of supply shortages but because the market is "nervous" and investors are speculating.
He adds OPEC still has spare capacity.