The Organization of Petroleum Exporting Countries (OPEC) has decided to maintain its current production quotas, saying there will be no oil shortage even if there is a war in Iraq.
OPEC ministers said there is no need to change production quotas, now officially at 24.5 million barrels per day. Members said any shortage in the event of a war against Iraq could be covered.
No official contingency plan was announced, but the cartel said it can produce an extra three million barrels per day if necessary.
OPEC does not want to give the impression it supports a U.S. attack on Iraq, a member country.
Analysts say all OPEC countries are producing nearly to their limit and that supplies from Venezuela are only slowly getting back to normal after a crippling strike. But Saudi Arabia says it could produce more oil if necessary.
The uncertainty surrounding the possible war has pushed oil prices up to their highest levels since the last Gulf War. OPEC fears prices could drop quickly if any war is short-lived.
But the president of International Energy Associates in Washington, Hermann Franssen, says if a war drags on, prices will stay high.
"The market will be impacted by an outage of Iraqi production for three months or longer, and that means that other OPEC producers have to increase production and you will get a situation where the market will remain rather tight for some time to come," he said.
U.S. Energy Secretary Spencer Abraham has said the United States would tap its national reserves as a last resort, in the event of a severe shortage, something OPEC is hoping to avoid.