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Opec developing contingency plan for oil supplies in case of war

The source said that Opec, at a meeting of the 11-nation group in Vienna next Tuesday would "see what measures are needed to offset a shortage if there is a military strike in Iraq."

He said the oil ministers would decide, in case of war, what to do with the "four million barrels per day" (bpd) Opec has in excess oil capacity.

Opec had agreed in January to raise its combined output ceiling by 6.5 per cent to 24.5 million bpd to try to cool feverish world oil markets.

But oil prices are rocketing as war seems to approach

Oil prices ticked higher in early trading in London yesterday, with the price of benchmark Brent North Sea crude oil for April delivery rising to $33.60 per barrel from $33.53 at the close of the previous session.

"The market is very, very nervous," said GNI trader Keith Pascall.

Opec has a $22-28 per barrel target price range.

The source said the contingency plan would be drawn up if there were "disruption of supply"

"It will depend on the duration and the extent of the (military) strike for this plan to be implemented," he said.

He added that the plan would "be drafted so that the ministers won't have to come back to Vienna for an emergency meeting" to deal with further price rises.