The fear of war in the Middle East has been the primary factor in driving the oil market for the past year. Rising US threats of an attack on Iraq pushed the oil market up through $US31/ barrel in September as the war price premium increased.

However, over the past the six months, slow global growth, OPEC overproduction plus the receding threat of conflict in Iraq has seen the price of crude lose its war premium and fall below $US24/barrel.

Speaking of Iraq, while there is much debate about a post-Saddam Iraq, according to the US Energy Department, Iraq is among the top producers of crude oil shipped to the US and ChevronTexaco is the number one importer of Iraqi oil.

ChevronTexaco imported 24% of the 129 million barrels of Iraqi crude oil brought into the US this year to July.

The purchases are legal and ChevronTexaco planned to keep buying Iraqi oil "if it makes economic good sense," the company spokesperson said.