Oil prices are close to a nine-month high due Iraq crisis.
Brent crude fell 27 cents to $114.79 a barrel, after reaching $115.71 on Thursday, the highest since September 2013.
Oilfields south of Baghdad, which export at least 2.5 million barrels per day of oil, are still unaffected.
But the fighting in the north poses a risk to supplies, while foreign oil companies are beginning to pull out staff.
Global spare capacity in oil production is at about 2%, he said, meaning that a spike in demand of more than 2% will outstrip production.
Islamist-led militants and pro-government forces are engaged in fierce battles for the Baiji oil refinery and Tal Afar airport in northern Iraq.
Baiji, Iraq’s biggest refinery, is surrounded by the rebels, who say they have seized most of Tal Afar airport.
The fighting comes a day after the US said it would send some 300 military advisers to help the fight against the insurgents.
Following Libya’s war and the toppling of Muammar Gaddafi, production recovered, but then eventually petered out, as a weak government and continued skirmishes disrupted production.
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