LONDON, Dec 27: Oil prices climbed above $30 a barrel here on Friday to levels not seen since September 2001, amid rising concerns about the impact of a strike in Venezuela and possible war in Iraq.

The strike has throttled the country’s crude shipments and forced the world’s fifth-largest oil exporter to import gasoline.

The price of benchmark Brent North Sea crude for February delivery rose to $30.10 a barrel here in late trading, against $29.61 at the close of Tuesday’s session.

The market was shut on Wednesday and Thursday for the Christmas holiday.

In New York, the price of reference light sweet crude February-dated futures fell 19 cents to $32.30 in early deals, after hitting a two-year high of $32.50 a barrel on Thursday.

“Venezuela continues to be the dominant driving force in the market and the latest move to import products only serves to divide both sides and threatens to protract the dispute,” said analyst Lawrence Eagles at brokers GNI.

“The intransigence on both sides makes it look as if the only way the situation will end is if it deteriorates into violence, forcing the military to step in.”

“Practically, the higher prices move on the Venezuelan strike issue, the greater the fall will be when the dispute ends,” he added.

Traders said that prices were also being driven higher by tensions between Baghdad and Washington over the nuts and bolts of UN weapons inspections in Iraq.

Traders are getting nervous that a war in Iraq might come before the Venezuelan strike is resolved, depriving world oil markets of a combined five million barrels per day of crude.

A study by the Energy Intelligence Group, a New York-based oil industry research firm, warns that a war in Iraq could cause oil prices to skyrocket in the case of a prolonged conflict.

But a brief showdown could leave the market with a supply surplus.

The study said that three factors would determine how disruptive a war in Iraq could be to global oil markets: the timing and duration of a war in Iraq, the response of the Organization of Petroleum Exporting Countries (Opec), and the situation in Venezuela.

In the most disruptive scenario, a war in Iraq starting in January would completely shut down the country’s oil production by February until June.

Although Opec has said it would try to make up for a cut in a oil supply from Iraq, social tensions in Venezuela could hold back a recovery in its exports until at least the end of February.

Under this scenario, EIG said, the oil market could lose five million barrels per day of production, which “would strain the global supply system to its limits.”

“But the combination of Opec supply increases and commercial inventories would be able to maintain a tight, but stable balance through the peak winter demand period, leaving a very lean spring market,” the group said.

The price of Opec’s basket of seven crudes eased to $30.69 a barrel on Thursday, down from Tuesday’s $30.94, the Opec news agency said on Friday.

Thursday was the eighth day Opec’s reference price was above the group’s $22-$28 target range.

No price was issued on December 25. The price for December 23 was $30.62.

The Organisation of the Petroleum Exporting Countries has an informal mechanism under which it can raise output quotas if its reference price stays above $28 per barrel for 20 days.—AFP/Reuters