Delegates from the Organization of Petroleum Exporting Countries announced their decision after a formal meeting at the cartel's headquarters in Vienna.
OPEC pumps about two-fifths of the world's oil, with an official production of 24.2 million barrels a day.
The meeting unfolded as the U.N. Security Council was debating whether to extend trade sanctions against Iraq, which suspended its crude shipments last month in a dispute with the United Nations. The Security Council approved a 5-month extension later in the day.
Britain on Monday indefinitely postponed a vote on a U.S.-British proposal to tighten sanctions on Iraq and introduced a new resolution to extend the U.N. oil-for-food program for Iraq for five months. The United Nations has regulated Iraqi trade since the 1990 Gulf War.
The head of Iraq's OPEC delegation, Saddam Hassan, said Iraq was prepared to renew its daily exports of 2.1 million barrels of oil "within a week" but only if the Security Council did not attach any conditions to an extension of sanctions.
"As long as it is a straightforward extension we are ready," Hassan said. The Security Council resolution appeared to carry no conditions.
OPEC president Chakib Khelil said a resumption in Iraqi exports would have a short-term "psychological" impact on oil markets. He added that OPEC expected prices to stabilize later in July and in August whether or not Iraq resumes sales.
"There was a complete consensus on not increasing production at this stage," he told a news conference after the meeting.
Libya's acting oil minister, Abdul Karim, expressed hope earlier that rising seasonal demand during the second half of the year would absorb any additional supplies from Iraq. Refiners typically buy more crude in the fall and winter to process into heating oil for consumers in colder climates.
Saudi Arabian Oil Minister Ali Naimi played down Iraq's potential impact on prices.
"It's just another source of supply and we have said we will handle either shortage or glut in the market," Naimi said. Saudi Arabia is OPEC's biggest producer.
OPEC delegates plan to meet again on Sept. 26 to review market conditions. A possible decrease in demand due to the slowing U.S. economy and a downturn in growth in Europe was a major concern, they said.
Although the cartel's decision came as no surprise, the unexpected twist in U.N. diplomacy toward Iraq caused oil prices to plunge Monday and led some OPEC members to question whether they shouldn't consider actually cutting production now to forestall further erosion in prices.
Iraq, which vigorously objected to the U.S.-British proposal for so-called "smart sanctions," halted the bulk of its crude shipments in protest in early June.
Naimi noted that global demand was sluggish and added that oil proucing nations have made large investments in production capacity that would lead to higher output levels in the future.
OPEC already has a plan to curtail its total production by 500,000 barrels a day if the average price of OPEC's benchmark crudes slips below $22 a barrel for 10 consecutive trading days. Conversely, OPEC has said it will boost output by half a million barrels a day if its benchmark or "basket" price exceeded $28 for 20 consecutive business days.
OPEC has targeted a basket price of $25 a barrel. On Monday, the basket price averaged $24.50.
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