Iran's OPEC governor on Tuesday dismissed the possibility of the producer bloc holding an emergency meeting, arguing that the surge in oil prices was linked to factors over which the group had no control.
The U.S. benchmark crude futures contract was trading at around $108 per barrel, while its London-based Brent futures counterpart was at about $120 per barrel. Both contracts were supported by uncertainty stemming from the fighting in Libya. Oil has spiked roughly 30 percent since February, influenced by mass protests that have swept the Arab world.
Mohammad Ali Khatibi, Iran's OPEC governor, said the recent price spike was related to the unrest, not market fundamentals, and that "any increase in such concerns will boost the prices, since oil price depends on the security of energy supply."
"A number of oil exporting countries which are encountering popular uprisings naturally affect the energy security of the consumer countries," Khatibi was quoted as saying on the website of Iran's semiofficial Fars News Agency on Tuesday. "And since OPEC has no control over the causes of the surge in oil prices, there won't be any emergency meeting," he said.
The unrest in the Arab world has touched the shores of the oil rich Gulf Arab states, four of which are members of the 12-nation Organization of the Petroleum Exporting Countries. Together, the bloc supplies about 35 percent of the world's crude.
The fighting in OPEC member Libya has unsettled the global oil market the most.
The North African nation has a production capacity of about 1.6 million barrels a day, but output has plummeted and exports essentially halted for weeks because of the fighting between forces loyal to Libyan leader Moammar Gadhafi and rebels in the east.
Oil markets have reacted more out of worries that the unrest in Libya will spread to more significant OPEC producers such as Saudi Arabia, Kuwait or the United Arab Emirates than concern that the absence of Libyan oil is undercutting supplies.
OPEC has left its official output quotas unchanged for over two years, and analysts are somewhat skeptical that the bloc will move to officially raise its production levels during the scheduled June meeting in Vienna, given that the members are already exceeding those quotas. Saudi Arabia has stepped in to offset the loss of Libyan oil by ramping up its output.