The price of Brent crude futures held above $112 a barrel on Wednesday amid concerns over an escalation in the Iraq crisis restricting global oil supplies.
Fighting in the OPEC producer has pushed up oil prices across the globe. Although exports from Iraq have not been restricted as a result of the disorder, fears over the government's ability to quell the violence have kept benchmark Brent above $112 a barrel.
The price for future deliveries of Brent swung between $112.41 and $112.08 on Tuesday morning, settling at $112.30 at 0622 GMT.
Prices were helped downwards by reports that Libyan rebels are set to reopen terminals at Ras Lanuf and Es Sider. The major oil export hubs have been blockaded by rebel groups seeking greater autonomy from central government for the east of the country.
If a deal is reached, Libya's ailing oil industry would receive a major boost as its export capacity would expand by 500,000 barrels a day.
Previous reports that the export terminals were set to reopen have not come to fruition.
Meanwhile, concerns over a lack of spare capacity in global oil production have helped push prices upwards.
"Saudi Arabia is the only one that has significant spare capacity. So it is a real worry if there is any serious disruption in exports," a trader with a north Asian trading house told Reuters.
Unused global spare oil production capacity could struggle to make up for a big outage, making it more likely governments would tap strategic reserves if violence in Iraq were to affect oil production and exports.