Russia will start supplies of up to 5 million metric tons (36.7 million barrels) of oil per year to China via Kazakhstan from 2008, the industry and energy minister said on Monday.

Oil prices traded at a record high Tuesday on concerns that Turkey will pursue Kurdish rebels into northern Iraq and disrupt oil supplies in the region.

LUKoil, Russia's leading independent crude producer, said Tuesday it expected oil prices for consumers in Western and Central Europe, whose supplies have been reduced, to increase.

Australia has admitted for the first time that securing oil supplies has been a key factor behind its involvement in the U.S.-led war in Iraq. Defense Minister Brendan Nelson says maintaining what he calls "resource security" in the Middle East is a priority for Australia, which still has about 1,500 troops in the region.

On June 20th Iran refused to rule out using oil supplies as a weapon in the standoff with the United States over its nuclear programme, saying Washington never had excluded attacking the Islamic country.

Russia is laying the infrastructure to become a major oil supplier to Asian countries, including an ambitious pipeline being built from Siberia to the Pacific coast, a Russian diplomat said today.

Oil prices dropped Thursday as Iran's announcement that it would free 15 detained British sailors helped to ease fears about a disruption in oil supplies. Light, sweet crude for May delivery fell 13 cents to US$64.25 a barrel in midmorning Asian electronic trading on the New York Mercantile Exchange. This followed a drop of 26 cents the day before.