Oil prices were higher in Asian trade on Monday amid concerns Iran would be hit with sanctions or even military action because of its controversial nuclear programme, dealers said.
At 2.25pm local time, New York’s main contract, light sweet crude for June delivery was at $72,40 a barrel, up 52 cents from $71,88 in the United States on Friday.
Brent North Sea crude for June delivery was up 43 cents at $72,45.
”Oil prices are still very bullish,” said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo.
The June contract fell in early trade on profit-taking but dealers had predicted the declines would be limited because of fears crude producer Iran would be hit with sanctions or even military action over its nuclear programme.
The market is now monitoring events closely after the United Nations atomic agency said Iran had failed to comply with a deadline of Friday to halt uranium enrichment — an appraisal that has the potential to lead to international sanctions.
Uranium enrichment makes fuel for civilian nuclear reactors but can also produce nuclear weapons material.
”People are watching the Iran issue very carefully and are waiting for the next step,” Emori said.
Tehran insists it is only developing a peaceful nuclear energy programme, but Washington believes Iran is seeking nuclear weapons.
US Secretary of State Condoleezza Rice on Sunday dismissed Iranian offers to allow spot inspections of its nuclear facilities and reopen discussions on a Russian proposal to conduct sensitive fuel cycle work for Tehran.
”I think they’re playing games,” she told ABC television after the International Atomic Energy Agency (IAEA) declared Iran in defiance of a UN order to halt uranium enrichment that could be used for a nuclear bomb.
Rice said the US would pursue its drive for a Security Council resolution against Iran under chapter seven of the UN charter, which would clear the way for possible sanctions or even military force.
Analysts fear that Iran — the second-biggest member of the Organisation of Petroleum Exporting Countries after kingpin Saudi Arabia — could respond to any UN sanctions by curtailing its exports.
The Islamic republic produces four million barrels of crude per day, about half of which it exports.
Elsewhere, continued civil strife in Nigeria will also keep the market worried, dealers said.
Separatist militants on Saturday carried out a car-bomb attack on fuel trucks in the Niger Delta and again warned oil companies to evacuate staff from the restive region.
Civil strife in Nigeria, Africa’s biggest crude producer, has cut the country’s exports of 2,6-million barrels per day by about a quarter. — Sapa-AFP