'Enough oil reserves to offset Iraqi situation'

A US official says there is ample oil production capacity to offset any supply disruptions.

FILE: Kurdish Iraqi Peshmerga forces deploy their troops and armoured vehicles on the outskirts of the multi-ethnic city of Kirkuk in northern Iraq on 12 June, 2014. Picture: AFP.

WASHINGTON - US Treasury Secretary Jack Lew said on Tuesday there was ample oil production capacity to offset any supply disruptions that may occur due to the violence in Iraq.

"I believe that world energy markets will be able to deal with the situation as it goes forward," Lew said at an event sponsored by the US-China Business Council.

"I don't think it's in the interest of any of the parties in Iraq for there to be a severe disruption in supply," he added. "There is sufficient capacity in the world right now to deal with whatever we need to deal with."

Iraqi troops have been battling for three weeks against fighters led by the group formerly known as the Islamic State in Iraq and the Levant (ISIL). Fighting has raged in recent days in former dictator Saddam Hussein's home city, Tikrit.