Oil higher in Asian trade amid West Asian tension

Oil rose in Asian trade today, sparked by heightened tensions between the US and major crude producer Iran, analysts said.

In morning trade, New York's main contract West Texas Intermediate light sweet crude for February delivery advanced 47 cents to $100.12 a barrel.

Brent North Sea crude for February was seven cents higher at $108.08 a barrel.

A showdown between Iran and the United States over Tehran's threats to close the strategic Strait of Hormuz to oil tankers is the main factor influencing short-term crude prices, analysts said.

"It's a cat and mouse game," said Jonathan Barratt, Sydney-based chief executive of Barratt's Bulletin, an independent commodity research firm.

 

"There is still a risk premium that will be bought into the market," he told AFP.

The United States yesterday said that Iran had exhibited "irrational behavior" by threatening to close a major oil shipping lane it also needs.

"We've seen quite a bit of irrational behaviour from Iran recently," State Department spokeswoman Victoria Nuland said when asked about Tehran's threat to shut down the Strait of Hormuz, a critical passage for more than a third of the world's tanker-borne oil.

"One can only guess that the international sanctions are beginning to feel the pinch, and that the ratcheting up of pressure, particularly on their oil sector, is pinching in a way that is causing them to lash out."

The US and the 27-nation European Union are considering new sanctions aimed at Iran's oil and financial sectors. But EU governments have been divided over whether to impose an embargo on Iranian crude.