Oil hits record $72 on Iran fears
Oil surged to a record high above $72 on Tuesday on concern that Iran's nuclear stand-off with the West could cut oil exports from the world's fourth-largest crude exporter.
In London, North Sea Brent crude oil jumped 74 cents to an all-time high of $72.20 a barrel as Iran and the West exchanged increasingly sharp words over the Islamic Republic's determination to push ahead with a nuclear program.
U.S. West Texas Intermediate crude oil hit a record $70.88, smashing through its end-August high of $70.85.
With almost a quarter of Nigerian oil production still shut after rebel attacks two months ago, oil consumers feel almost as vulnerable as they did during the Arab oil embargo in the 1970s.
Oil prices have soared from $20 at the start of 2002 and are now nearing the inflation-adjusted peaks of over $80 hit in 1980, the year after the Iranian revolution.
Initially fired by strong demand from the United States and the fast-growing economies of China and India, the rise has accelerated over the past year on worries over supplies.
Iraq's once significant oil industry is in crisis,
Nigerian exports have been slashed by rebel attacks on the world's eighth
biggest exporter and consumers are worried that Iran's exports could
fall victim to its nuclear dispute with the West.
President Mahmoud Ahmadinejad declared Iran a nuclear power last week, saying it had enriched uranium to the level used in power stations. On Tuesday, he delivered a warning to any nation considering attacking the Islamic republic.
"Today, Iran's army is one of the most powerful armies in the world and it will powerfully defend the country's political borders and the nation," Ahmadinejad said in a speech during an armed forces parade.
The United States has said it wants a diplomatic solution to the standoff but has not ruled out a military option.
It meets with world powers on Tuesday to consider targeted sanctions against Iran and has said it wants the U.N. Security Council to be ready to take strong diplomatic action.
The disruption to Nigeria's crude output will become more critical as the U.S. driving season begins next month. Analysts reckon gasoline stocks in the world's top oil user fell again last week. ()
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