Brent crude oil prices firmed on Monday, trading above $113 a barrel, lifted by Iran’s threat to shut a key oil-shipping route although worries over the economic health of the euro zone kept gains in check.
Iranian officials have in recent weeks threatened to block the Strait of Hormuz if new sanctions imposed by the United States and planned by the European Union, with the aim of discouraging Iran’s nuclear programme, harm Tehran’s oil exports.
“Overall, the geopolitical premium is supporting amid tensions with Iran, but on the other hand, the price of crude in euros remains high and will hurt demand in Europe,” said Olivier Jakob from Zug-based consultancy Petromatrix.
February Brent crude futures were 34 cents higher at $113.40 a barrel by 0945 GMT, after gaining more than five per cent last week. On the New York Mercantile Exchange, February US light crude futures were up 10 cents at $101.66 a barrel.