REPUBLIKA.CO.ID, JAKARTA -- Finance Minister Chatib Basri said here on Friday he believed the current world oil price hike will be temporary due to the geopolitical development in Iraq.

"I believe it is only temporary. So, let us wait and see," he replied when asked about his views on the development.

Chatib noted that although it will be only temporary, the government has been monitoring the political development in the Middle Eastern country.

"We are monitoring the situation. But we still believe that the average Indonesian crude price will remain at US$105 annually," he said.

The finance ministry has recorded that the Indonesian crude price had reached US$106 or higher per barrel until May 31, 2014, than the assumption in the 2014 revised budget set at US$105.

The world oil price soared on Friday morning following the escalation of violence in Iraq.

In London, Brent crude for August delivery rose by 80 cents to US$115.06 per barrel, which is the highest since early September.

In New York, the light sweet crude or West Texas Intermediate for July delivery rose 45 cents to US$196.43 per barrel.

The price hike continued after US President Barack Obama announced his readiness to send 300 military advisers to Iraq.

Extremists have occupied a number of areas in the northern part of Iraq but have not yet threatened the main oil-producing region in the south.

The crisis has shocked the world oil market, as Iraq is the world's second largest oil producer among 12 members of the Organization of Petroleum Exporting Countries.

Iraq possesses more than 11 percent of the world's oil resources, producing 3.4 million barrels of oil per day.

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