World oil prices have so far not been pushed up much by post-election violence in key crude producer Iran -- but they could spike higher if the situation deteriorates, analysts have warned.

Iran has ruled out cancelling the disputed presidential June 12 vote as the international community voices increasing alarm at a violent crackdown on opposition demonstrators.

The Islamic republic produces about 3.8 million barrels of crude oil per day and is the third biggest global oil exporter after Russia and Saudi Arabia.

Analysts fear the biggest crisis since the 1979 revolution could force the Iranian government to cut off oil supplies or block the Strait of Hormuz -- a crucial passageway for oil tankers.

"There could be a rude awakening (for the oil market) if tensions in Iran escalate further," said VTB Capital analyst Andrey Kryuchenkov.

"Not only does the country pump a significant amount of OPEC crude, it also controls the Strait of Hormuz through which around 40 percent of global seaborne oil flows daily."

The opposition has been staging almost daily rallies to protest at alleged fraud and widespread irregularities in Iran's election which returned hardline President Mahmoud Ahmadinejad to power for another four years.

But oil prices have fallen heavily since the election, dampened by the dire global economic outlook and a stronger dollar.

New York's main futures contract, light sweet crude for delivery in August, traded at about 67 dollars per barrel on Tuesday. That compared with more than 72 dollars one week earlier.

"Although the markets are clearly not fazed by developments there thus far, we would not dismiss the likelihood that the (Iran) situation could come back to have a more forceful impact on oil prices -- particularly if the opposition manages to pull off a national strike that could potentially spread to the oil sector," said MF Global analyst Edward Meir.

"Needless to say, the odds arrayed against the opposition are daunting, as many of its leaders are jailed, while communications among the remaining are severely hampered and monitored.

"Nevertheless, the situation remains very fluid and anything is possible at this stage."

World leaders are calling for an immediate halt to state violence against the protesters, but the Iranian authorities have fired back, accusing Western governments particularly Britain and the United States of meddling.

Iran's state media said at least 17 people have been killed and many more wounded in the unrest that has convulsed the nation for 11 days.

After Saudi Arabia, Iran is the second largest member of the 12-nation Organization of Petroleum Exporting Countries (OPEC), which accounts for 40 percent of all world crude supplies.

"There is no indication that (Iranian) oil production will be affected," said Francis Perrin, director of the journal Arab Oil and Gas.

He added that traders expected other OPEC member nations would compensate for any potential loss in Iranian oil output.

Analyst Nimit Khamar, at Sucden Financial Research, noted that there had not yet been any disruption.

"Post-election protests continue, but there does not appear to be any disruptions to oil supply yet.

"However, there is market talk that Iranians are trying to organise a national strike including the oil industry in reaction to the reappointment of Ahmadinejad."

OPEC's member countries have spare capacity of around six million barrels per day, according to a recent estimate from the Paris-based International Energy Agency.

Hanson Westhouse analyst David Hart told AFP that the oil market would benefit from high stockpile levels as well.

"The external environment is in a better position to cope with any potential disruption due to a healthy production capacity buffer elsewhere and high existing stockpiles during a period of generally weak demand," Hart said.

But he added: "With a partial (oil output) disruption, I think we head back above 70 dollars per barrel. A full disruption, depending on the length and the time it takes spare capacity to come on-line, could run significantly higher.

"The problems for now appear to be contained within Iran which makes the threat of an actual disruption lower. A disruption is more likely to occur, in my view, if external parties were to become involved," he continued.