Oil rose more than $3 a barrel on Monday to a new record above $143, propelled by heightened market fears of conflict between Israel and Iran over Tehran’s nuclear programme.
Prices later retreated from session highs, partly reflecting a rebound in the dollar versus the euro.
US light crude was up $1,76 at $141,97 a barrel by 1.57pm GMT, after a record high of $143,67 a barrel.
London Brent crude was up $1,91 at $142,22.
”There are many high-level geopolitical news items, particularly in the Middle East, that are pushing prices up,” said Mark Pervan, a senior commodities analyst at the Australian & New Zealand Bank in Melbourne.
Iran’s Revolutionary Guards have said Iran would impose controls on shipping in the Persian Gulf and Strait of Hormuz if it were attacked.
The Strait of Hormuz, a narrow waterway separating Iran from the Arabian Peninsula, accounts for roughly 40% of the world’s traded oil flows.
Iran’s foreign minister said on Sunday he did not believe Israel was in a position to attack his country over its nuclear programme.
Iran’s dispute with the West over its nuclear development programme is just one of many factors behing oil’s rise to record peaks.
Oil has risen more than 40% this year, extending a six-year rally, in response to the Middle East tensions, plus expectations that supply will struggle to keep pace with rising demand from emerging economies such as China and India. — Reuters