Rio de Janeiro: Venezuelan President Hugo Chavez has said that the US invasion of Iraq is partly to blame for the rising oil prices.

Oil producing countries are not to be held responsible for the surge in oil prices, but the US is "partially to blame" for it, Chavez told a press conference during a visit to Recife in northeastern Brazil on Thursday.

Chavez met his Brazilian counterpart Luiz Inacio Lula da Silva. State-owned oil and gas companies, Petrobras of Venezuela and PDVSA of Brazil, have signed a cooperation agreement as part of his visit.

Chavez said as a member of the Organisation of Petroleum Exporting Countries (OPEC), Venezuela favours the fixing-price system that has worked well for three years, but the US invasion of Iraq has brought instability to the market.

Venezuela is not interested in oil price hikes, and on the contrary, it hopes to see prices stabilise and that the US economic crisis does not worsen.

"May they leave that situation quickly, but they will obviously have to revise their economic policies, which have affected the whole world so much," he said.

Chavez also pointed out that Venezuela and Brazil have not been harmed by the financial crisis, thanks to the diversification of their exports.

The two countries should seek more common ground and further promote their ties, the Venezuelan president added.

Source : IANS