US benchmark crude prices soared to yet another record of $46.65 a barrel on Friday following news of a blast at the Whiting, Indiana refinery, and fears about possible unrest in OPEC producer Venezuela during this weekend's referendum on the rule of President Hugo Chavez.
News that Iraq has stopped oil exports from the key southern pipeline came as Iran said global markets were oversupplied by 2.8 million bpd of crude and that there was no reason for OPEC to raise production to cool down sizzling oil prices.
Disrupted oil export
The instability and damage to the main export pipeline in the south from attacks has disrupted Iraq's oil exports during the past five days.
Only the tanker Antonius was loading on Saturday at 864,000 barrels a day (bpd) from platform number two at the Basra terminal, formerly known as al-Bakr Port (Ahmad Hasan al-Bakr is a former Iraqi president, 1968-1979).
Flows to offshore terminals, which account for all of Iraq's exports, were running through another smaller pipeline at a rate of one million barrels a day. The larger pipeline has a capacity of 1.5 million bpd.
Iraqi authorities have halted oil export flows from the main pipeline in southern Iraq after intelligence showed the infrastructure would be hit, an oil official said on Saturday.
The shutdown kept loadings at southern oil terminals at half their normal level, undermining the goal to raise revenue as oil prices hit record highs, partly in response to the instability in Iraq.
"The situation in Basra is bad. Management ordered the pipeline shut late yesterday," said the South Oil Company official, who declined to be named.
"Very few people showed up to work again today. The feeling is it is not wise to challenge al-Sadr's followers."
He was referring to the resistance led by Shia leader Muqtada al-Sadr, whose Mahdi Army is fighting US-led occupation forces in central and southern Iraq.
The Mahdi Army has vowed to attack oil facilities in response to the US offensive on Najaf.