Oil surged past $104 in Asian trade Thursday as inflamed geopolitical tensions in the Middle East drove supply concerns, analysts said.
Brent North Sea crude for delivery in April was up 24 cents at $104.02 per barrel and New York’s main contract, light sweet crude for March, gained nine cents to $85.08 in the afternoon.
Growing animosity in the Middle East was rallying crude prices, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.
“Geopolitical tensions in the Middle East are keeping oil prices up,” he told AFP.
“This is all due really to the news that Iran is going to send ships to the Suez Canal, and also other news about people protesting in other countries besides Egypt,” Shum added.
Israel’s Foreign Minister Avigdor Lieberman Wednesday said Iran was sending two warships into the eastern Mediterranean, labelling the act a “provocation” that the Jewish state cannot ignore for long.
He added that Iranian warships cruising past Israel’s coast was something that had not occurred for many years and was a “provocation that proves the self confidence and cheek of the Iranians is growing from day-to-day.”
Elsewhere in the Middle East, pro-democracy protests erupted in violence in Bahrain, with reports of two killed as security forces attacked demonstrators in Manama on Thursday.
Tensions in the Middle East, home to major Organization of the Petroleum Exporting Countries (OPEC) members, tend to push oil prices higher as traders worry over the potential for supply disruption.
Massive street protests in Egypt this month that ended President Hosni Mubarak’s 30-rule have inspired mass actions in other parts of the politically volatile region demanding greater freedoms.