July 15 (Bloomberg) -- Libya, North Africa's largest oil producer, will cut output by 5.7 percent because of pipeline maintenance, trimming supplies at a time of near-record prices.

The repairs will shut down 100,000 barrels a day of production this week, Shokri Ghanem, the country's top oil official, said in telephone interview today. Libya has already idled Total SA's 75,000 barrel-a-day al-Jurf field after a drilling accident in May.

Lower production from Libya will lessen the impact of a 200,000 barrel-a-day production increase announced by Saudi Arabia in June in an attempt to reduce prices that reached a record $147.27 in New York last week. Iraq said today it had cut oil exports because of domestic demand and power shortages.

``Saudi Arabia's oil supply increase has already gone to Asia and these barrels are probably aimed at Europe,'' said Ehsan Ul-Haq, head of research at Vienna-based consultancy JBC Energy GmbH. With Iraqi ``supplies already cut, it could mean Mediterranean supplies become tighter,'' he said.

Libya, Africa's third-largest producer behind Angola and Nigeria, produced 1.74 million barrels a day of crude oil in June, according to Bloomberg estimates.

Al-Jurf Repairs

Repairs to al-Jurf may take another month, said Ghanem, who heads Libya's National Oil Corp. The latest 100,000 barrel-a-day reduction is caused by work to a gas pipeline, he said.

``That's a pipeline for associated gas that links the Waha and Defa oil fields, it will remain shut for three or four weeks because of maintenance,'' Ghanem said in a telephone interview today from Tripoli. ``If we don't reduce production, we would be obliged to flare the gas.''

The Libyan official stood by his forecast last month that crude would reach $150 a barrel before the end of the summer. Political tension in the Middle East and the decline of the U.S. dollar against the euro will support prices, he said.

Crude oil futures fell as much as 6.4 percent to $135.92 a barrel in New York trading today.

Iraq, holder of the Persian Gulf's third largest oil reserves, has reduced Kirkuk-grade crude exports to the Turkish Mediterranean port of Ceyhan below 400,000 barrels a day.

Kirkuk exports have dropped as Iraq redirects crude oil to the 310,000 barrels-a-day Baiji refinery, north of Baghdad, an oil ministry official, who declined to be identified for security reasons, said in a phone interview today.

To contact the reporters on this story: Maher Chmaytelli in Vienna at mchmaytelli@bloomberg.net; Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

Last Updated: July 15, 2008 13:32 EDT