Oil struck its highest level of 2007 near 64 usd in London as tensions with Iran continued to stoke supply fears. Yesterday, Iran shunned another attempt by the UN to force the country to halt its uranium enrichment programme, heightening already volatile tensions and sparking supply fears. At 10.22 am, London Brent crude for May delivery was up 64 cents at 63.82 usd a barrel, after adding 67 cents to settle at 63.18 usd on Friday. Prices had hit 63.97 usd earlier in the session. New York crude for May delivery was up 60 cents at 62.89 usd a barrel. The UN Security Council announced new resolutions on Saturday which ban Iran from exporting conventional arms and call for freezing financial assets abroad of 28 individuals and groups. Some of those affected are reported to be involved in militant movements outside Iran. “I can assure you that pressure and intimidation will not change Iranian policy,” said Iranian Foreign Minister Manouchehr Mottaki, after hearing the updated sanctions. “Suspension is neither an option nor a solution.” Energy market participants fear if the West takes draconian measures to stop Iran’s nuclear programme the country might retaliate by refusing to supply oil. Tensions were already high on news on Friday that 15 UK sailors and marines were seized by Iranian naval vessels in Persian Gulf waters. “The international incident brings into focus the tensions surrounding the oil producer and the West, coming as it does when the UN are discussing a fresh resolution on Iran’s contentious uranium enrichment programme,” said Paul Harris, Bank of Ireland analyst. Oil was also underpinned as last week’s snapshot of oil stocks in the US last week showed gasoline fell by more than the market had expected.

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