The energy industry can do little to counter the factors beyond market fundamentals that have driven oil prices to record levels, a senior executive at Saudi Aramco said.

Oil prices soared to a record above $90 a barrel on Friday on rising tension between Turkey and Kurdish rebels in northern Iraq, winter supply worries and a weak dollar.

'There are many forces at play, no longer the fundamentals alone,' Khalid Al Falih, executive vice president of Aramco operations, said.

'You've got geopolitics, the role of the speculators, the dollar, the credit crunch ... these things play a role in influencing prices that no company or the whole industry can do much about.'

Saudi Arabia was boosting output in line with the Opec agreement last month to increase supply by 500,000 barrels per day (bpd) from Nov 1, Falih said.

Saudi output would be at the level allocated under Opec's output target 'to the barrel,' he added, declining to give actual output.

The kingdom holds most of the world's spare capacity and will shoulder the lion's share of the Opec rise, cranking up output to 9 million bpd from around 8.7 million now.

It was still unclear how much the high price would encourage the growth of alternative fuels and affect future demand for Saudi oil, Falih said on the sidelines of a groundbreaking ceremony for the new King Abdullah University for Science and Technology.

Saudi Arabia has yet to commit to boosting capacity beyond its 2009 target of 12.5 million bpd and would need to see concrete evidence of demand for its oil before going any further, he added.

The 2009 target will ensure spare capacity of 1.5 million to 2 million bpd to deal with any unexpected shortfalls in global supply 'well into the next decade,' he said. 'Until we see that we are eating into that (spare capacity), we will not announce other commitments.'

Concern that Saudi Arabia may not be able to sustain much higher output was unfounded, Falih said.

'Our reserves speak to the fact that we could go beyond 12.5 million bpd. There should be no doubt in the industry about Aramco's ability to implement programmes that would increase our capacity. They will be scheduled, funded and announced when the time is right.' he said.

The next large project, the 900,000 bpd Moneefa field due online in 2011, would not boost Aramco's capacity but instead would compensate for declines from other fields, he added.

The kingdom holds the world's largest proven oil reserves, more than 260 billion barrels. Reserves were potentially much higher, he said.

Despite rising costs, Falih said he was 'fairly certain' that ConocoPhillips and Total would commit to building two new joint venture export refineries with Saudi Aramco.

'We see the projects going through,' he said.

'There is a fundamental need for the increment in refining capacity. There is probably no better place to build a refinery than in Saudi Arabia, where you've got security of supply, short supply lines, and low working capital requirements.'

Costs have spiraled for downstream projects globally, leading to industry speculation that Conoco or Total may pull out of the projects to build 400,000 bpd plants in Yanbu and Jubail. Falih declined to give a cost estimate for the plants. The Conoco plant was last estimated in March to require around $6.4 billion.

Exploration by four consortia of European, Russian and Chinese firms for gas in Saudi Arabia's Empty Quarter had yet to result in discoveries of commercial quantities of gas, Falih said. Aramco remained optimistic that commercial discoveries would be made, he said.

Saudi Arabia opened its gas fields to international firms to meet rising demand from its growing population and expanding industrial and petrochemical sectors. The upstream oil sector remains off-limits.

Aramco has delayed a tender for work at the Moneefa fie