Oil supply boost won't lower prices: Iraq

By Mariam Karouny and Alastair Sharp

LONDON (Reuters) - Any increase in world oil output would not have a significant impact on record-high crude prices that are being driven by speculation, Iraq's oil minister said on Tuesday.

Regulations needed to be introduced to stabilize oil markets, Hussain al-Shahristani said in an interview with Reuters.

"I do not think increasing any amount in the international market will have a significant impact on the prices," he said.

"It is up to the stock exchange and the regulations in the industrialized nations. It is not something OPEC can contribute to," he said.

"We did not see any impact on the prices from the Saudi's previous increase," he said.

Top oil exporter Saudi Arabia is poised to boost production in July to its highest level in decades as it looks to tame runaway oil prices. Saudi Arabia already raised output in May.

Oil prices have doubled in a year to hit a record close to $140 a barrel on Monday. Saudi Arabia has called a hastily convened meeting of oil producers and consumers in Jeddah on June 22 in an effort to stabilize the market.

Shahristani, who will not attend the Jeddah meeting, reiterated that Iraq had boosted oil output to more than 2.5 million barrels per day (bpd) in June, the highest level since the U.S.-led invasion in March 2003.

The holder of the world's third-largest oil reserves aimed to boost output by another 300,000 bpd by the end of the year, he said.

"Any additional increase in production will all go to exports," he said.

Iraq is an OPEC member, but it is free to set its own production levels after years of sanctions under Saddam Hussein.

CONTRACTS TO COME

Baghdad hoped to sign short-term technical service contracts with international oil companies to boost output at some of its largest producing oilfields within two weeks, Shahristani said.

"We are reaching the end of our discussions and there are some drafts that are ready ," he said.

Iraq needs billions of dollars to rebuild its economy and overhaul the energy industry after years of sanctions and war. International oil companies are keen to invest in Iraq as they struggle for access to new oil and gas reserves worldwide.