Oil prices have climbed in the global market after Iran warned that it might close the Strait of Hormuz should the US-led Western states impose sanctions against the country's oil sector.
On Tuesday, US crude for February delivery rose 1.7 percent to nearly USD 100.50 a barrel.
Brent North Sea crude, one of the best performing, widely traded assets in 2011, rose 1.2 percent to USD 108.65 a barrel for February delivery.
"Over the next few months, it will be a balance of economic issues in Europe and the US versus bullish geopolitical factors and the reality of economic growth in major Asian economies," said Victor Shum, a senior consultant at Purvin and Gertz.
"Geopolitical tensions over Iran have also supported the market," he added.
On December 27, 2011 Iran's First Vice President Mohammad-Reza Rahimi warned that imposing sanctions against the country's energy sector will prompt Tehran to prevent oil cargoes from passing through the strategic Strait of Hormuz.
“If they impose sanctions on Iran's oil, not even a drop of oil will be allowed through the Strait of Hormuz,” he added.
Michael Mann, the spokesman for the EU's Foreign Affairs chief Catherine Ashton, said on December 29, 2011 that "the European Union is considering another set of sanctions against Iran and we continue to do that."
He noted that the decision would be taken in the next meeting of EU foreign ministers in Brussels on January 30, 2012.
The EU foreign ministers failed in their attempts to enforce an embargo on Iran's oil exports during a December 1, 2011 meeting in Brussels.