But the head of one of the world's major oil firms believes industrial nations have sufficient stockpiles to withstand any output cuts.

"There's a lot of oil to take care of a very significant shortfall for quite a period of time," Lord Browne, chief executive of BP told BBC Radio.

On Tuesday, two big oil companies warned they were raising prices at the petrol pumps in the UK.

ChevronTexaco said its prices would go up by a penny (1.5 US cents) a litre, taking the minimum price for unleaded to 73.9 pence a litre. TotalFinaElf said it was doing the same.

Air travel could also face a hike in costs, as jet fuel prices hit a post-11 September high.

Jitters

The rise in petrol prices in the UK is the direct result of an 11% climb in the price of wholesale gasoline last week, in the face of ever-louder noises about war with Iraq from Washington DC and London.

And the cost of aviation fuel reached $283 a tonne, threatening airlines already burdened with heavy losses from the disruption which followed the 11 September attacks on the US.

The insistence from both President George W Bush and Prime Minister Tony Blair that Iraq's president, Saddam Hussein, is rebuilding nuclear, chemical and biological weapons stockpiles is setting traders' nerves on edge.

Benchmark Nymex crude oil in the US has touched $30 a barrel in the past 24 hours.

The Organisation of Petroleum Exporting Countries (OPEC) likes to keep prices between $22 and $27, and a meeting later this month could well produce a production boost.

But till then the jitters are set to continue, market watchers said.