Oil jumps to 9-month high after Iran cuts supply

Oil jumps to 9-month high after Iran cuts supply

Oil prices jumped to a nine-month high near USD 105 a barrel today in Asia after Iran said it halted crude exports to Britain and France in an escalation of a dispute over the Middle Eastern country's nuclear programme.

Benchmark crude was up USD 1.75 to USD 104.99 per barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

Earlier in the day, it rose to USD 105.21, the highest since May. The contract rose 93 cents to settle at USD 103.24 per barrel in New York on Friday.

Brent crude was up USD 1.52 at USD 121.10 per barrel in London.

Iran's oil ministry yesterday said it stopped crude shipments to British and French companies in an apparent pre-emptive blow against the European Union after the bloc imposed sanctions on Iran's crucial fuel exports. They included a freeze of the country's central bank assets and an oil embargo set to begin in July.

Iran's Oil Minister Rostam Qassemi had warned earlier this month that Tehran could cut off oil exports to "hostile" European nations. The 27-nation EU accounts for about 18 per cent of Iran's oil exports.

The EU sanctions along with other punitive measures imposed by the US are part of Western efforts to derail Iran's disputed nuclear programme, which the West fears is aimed at developing atomic weapons. Iran denies the charges, and says its programme is for peaceful purposes.

Oil prices were also boosted by China's decision to boost money supply in a bid to spur lending and economic growth.

China's central bank said on Saturday it will lower the ratio of funds that banks must hold as reserves, a move that frees tens of billions of dollars.

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