Idemitsu Kosan : PAJ president - oil supply disruption in Libya, Iraq could be offset by OPEC output

Oil supply disruptions in Libya and Iraq could be offset by increased output from OPEC, limiting the impact on global oil markets, the head of the Japanese petroleum industry said on Monday.

"Oil prices may fluctuate due to the latest incidents, but we don't have to worry about too much about demand and supply balance as OPEC can cover shortfalls (from Libya and Iraq)," Takashi Tsukioka, president of the Petroleum Association of Japan (PAJ), told a news conference.

Tsukioka, also serves as chairman of Idemitsu Kosan, said Japanese refiners may buy oil from the shared oilfields between Kuwait and Saudi Arabia as they have used the oil in the past.

Two major oilfields in southwest Libya began shutting down on Sunday after forces loyal to Khalifa Haftar closed a pipeline, potentially reducing national output to a fraction of its normal level, the National Oil Corporation (NOC) said.

Kuwait and Saudi Arabia agreed last month to end a five-year dispute over their shared Neutral Zone in a deal which will allow production to resume at two oilfields that can pump up to 0.5% of the world's oil supply.

(Reporting by Yuka Obayashi; Editing by Kim Coghill)