The price of oil has shot up again after US President George W. Bush said "the game is over" for Iraqi President Saddam Hussein.

A war in Iraq, the world's eighth largest oil exporter, could disrupt supplies from the Middle East and further reduce low global reserves.

It is a bit ironic. Our dependence increased on Iraqi oil just as we're about to bomb them Bill O'Grady A.G. Edwards

In London, Brent crude for March delivery peaked at $32.50 during the day's trading, before ending at $32.34 - a rise of 90 cents on the day.

In the US, crude oil futures rose 96 cents to $35.12 a barrel but at one point had reached $35.25.

United Nations weapons inspectors are due back in Iraq this weekend ahead of an address to the Security Council on 14 February.

Low reserves of heating oil in the US, as the freezing winter weather sets in, has also help prices move higher.

Total US crude stocks are down to their lowest levels since 1975 due to a strike in Venezuela, the world's fifth largest oil exporter which supplies 13% of US needs.

Tragic irony

Prices could be further under pressure as oil market data has shown that US consumption of Iraqi oil jumped 24% in January to cover the shortfall in Venezuelan supplies.

Venezuelan oil-workers have been taking part in a strike by right-wing business and labour groups to remove the democratically elected president from power.

"It is a bit ironic," said Bill O'Grady of A.G. Edwards, a broker in the US.

"Our dependence increased on Iraqi oil just as we're about to bomb them."

The price rise comes despite assurances from the International Energy Agency (IEA) that it would release reserves if there is a war.

The agency's incoming executive director, Claude Mandil, told the Wall Street Journal reserves would be made available "swiftly and, if necessary, massively".

The IEA's 26-member nations hold large reserves of oil for emergencies use in the US, Europe, Japan and South Korea.