Oil prices jumped to over $101 (Dh371) a barrel yesterday amid concerns that rising tensions between Western powers and Iran could lead to crude supply disruptions.
By early afternoon in Europe, benchmark crude for February delivery was up $2.67 to $101.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 82 cents to settle at $98.83 in New York on Friday. Global oil markets were closed on Monday for the New Year's Day holiday.
In London, Brent crude was up $2.70 at $110.08 a barrel on the ICE Futures exchange.
Iran flexes muscle
On Monday, Iran test-fired a surface-to-surface cruise missile, part of 10-day naval manoeuvres.
Iran's navy chief Admiral Habib Allah Sayyari said the test showed the key oil passageway, Strait of Hormuz is "completely under our control".
"The ever-growing frequency of intense saber-rattling and muscle flexing between Iran and the US should keep the markets jittery and vulnerable to sudden price jumps," anal-ysts at JBC Energy in Vienna said.