Saudi Arabia has said its agreement to boost oil production to nearly 9.7 million barrels per day is commercial not a political decision and hinted the increase would depend on demand, a Saudi newspaper reported.

The Saudi Oil Ministry said the world's dominant crude exporter begin hiking output next month in line with a decision announced at last week's Jeddah meeting that brought together oil producers and consumers.

"The Kingdom will start raising its oil production to 9.7 million bpd from early July," Okaz Arabic language daily quoted a senior Oil Ministry official as saying.

"The decision to increase production is a commercial rather than a political one and the increase will be subject to demand and supply."

Oil prices remained at historically high levels despite Riyadh's announcement of the planned increase.

Gulf oil sources said they expected higher Saudi output would not have a major impact on crude prices, adding this would prove Opec's argument that the price surge has nothing to do with a supply shortage.

Addressing an oil seminar in Tokyo, a Saudi Aramco official said supply-demand factors are only partially to blame for high prices.

Strong prices do owe something to supply and demand trends in both the crude oil and refined products markets, and we have seen relative tightness in both cases, said Abdulaziz Al Khayyal, Saudi Aramco Senior Vice President for Industrial Relations.