Oil prices higher in Asia on Iran-West tensions
SINGAPORE - Oil prices climbed in Asian trade Tuesday on fresh worries over tension between Western powers and major producer Iran.
New York's main contract, West Texas Intermediate crude for delivery in February, gained $1.50 to $100.20 in the afternoon.
Brent North Sea crude for March delivery was up 58 cents at $111.92.
"The (European Union) embargo on Iranian oil could be brought forward, and this is supporting the increase in crude prices," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.
EU foreign ministers are due to meet on January 23 to finalise the timeline for an embargo on Iran as part of fresh sanctions over claims the country is building an atomic bomb.
France is seeking a faster implementation, while many of the eurozone's troubled economies that depend on Iranian oil are seeking a six-month delay.
Iran has insisted that its nuclear programme is for peaceful purposes.
Tensions were further stoked as Tehran warned Gulf states not to make up for any shortfall if its oil exports are cut as a result of new sanctions.
If Arab neighbours compensate for a looming EU ban on Iranian imports, "we would not consider these actions to be friendly," Iran's representative to OPEC, Mohammad Ali Khatibi, warned in remarks published on Sunday.
In comments recorded before Tehran's warning, Saudi Arabia's oil minister told CNN that the world's top crude producer is ready to make up for any shortfall in Iran's oil exports.
"We are idling now between 9.4 and 9.8 (million barrels per day)... so we have substantial spare capacity (to produce) 12.5" million bpd, said Ali al-Naimi.
"I believe we can easily get up to 11.4, 11.8 (million bpd) almost immediately, in a few days. Because all we need is to turn valves. Now to get (the rest) we probably need about 90 days," he said.
The situation in Nigeria also remains a concern for the oil market despite labour unions calling off nationwide strikes after President Goodluck Jonathan watered down fuel hikes implemented at the start of the year.
"Concerns over a supply disruption in Nigeria have eased ... but the situation definitely remains tense," said Shum.
The strike and mass protests had shut down Africa's most populous nation and largest oil producer, putting intense pressure on the government as it also faced a wave of attacks blamed on Islamists.