Oil prices rose on Wednesday, pushed higher by sabotage attacks that knocked out Iraq's crude exports and the assassination of a senior official running the country's northern oilfields.
A call by the head of OPEC for producers outside the cartel to raise global supplies to cool prices was rebuffed by Russia, which said it had no spare capacity to boost supplies.
U.S. light crude climbed 26 cents to $37.45 a barrel, while London's Brent crude rose 27 cents to $35.30 a barrel.
"Iraq's exports were about 1.6 million barrels a day, that's what I guess the world's spare capacity to be at the moment. So there's no fat left, there's no room for error, accident or more attacks," said David Thurtell at Commonwealth Bank of Australia.
Iraqi crude exports ground to a halt after a sabotage attacks this week on pipelines in the north and south of the country that feed Iraq's only export terminals.
"There are no exports from Basra oil terminal or Khor al-Amaya and it is unclear when they will restart," an Iraq oil official told Reuters. "Both pipelines feeding the terminals have been destroyed."
Iraq was exporting more than 1.6 million barrels daily from the southern ports, most of which was loaded at the Basra terminal. Sabotage was also blamed for an explosion on Tuesday at a pipeline in the northern Kirkuk oilfields.
In another blow, Iraqi police said on Wednesday that gunmen killed Ghazi Talabani, a senior official in Iraq's North Oil Company.
Fears that militants will strike at oil facilities in the Middle East have helped stoke high prices this year. Robust economic growth and strong oil demand, especially in the United States and China, have left little room in the supply chain for any disruption.
OPEC president Purnomo Yusgiantoro said on Wednesday he will send requests to Russia, Angola, Mexico and Oman to pump more crude. Together the non-OPEC producers account for 14.64 million barrels per day, or 18 percent of global supply.
"They have spare capacity to increase production," Purnomo, who is also Indonesia's oil minister, told reporters.
But the Interfax news agency quoted Moscow's number two oil official as saying that Russia, the biggest non-OPEC producer, had no spare capacity.
"We don't have a tap that we can just turn on and off. We are producing exactly as much as we can," Sergei Oganesyan said.
The 11-member Organisation of the Petroleum Exporting Countries agreed on June 3 to increase formal supply limits by two million barrels per day from July 1 and by another 500,000 from August 1 to calm oil prices, which hit 21-year highs above $42 a barrel earlier in June.
Consultancy Petrologistics estimates OPEC 10 output for June at 27.4 million barrels per day, just 500,000 barrels per day short of what the International Energy Agency (IEA) says is the group's sustainable capacity.
Mexico has said it aims to increase crude exports to 1.95 million barrels per day from 1.88 million by the second half of 2004, while Oman plans to spend $727 million this year to arrest a steep decline in output from its ageing fields.