World oil prices surged this evening as traders seized on reports that Iranian crude exports were expected to fall this month.
US crude went as high as $108.25 a barrel - the highest level since March 2 -- before pulling back to $107.31, up $1.96 from Thursday's close. Brent North Sea crude jumped as high as $127.06 in London, before slipping to $125.35, up $2.21.
The oil market also rebounded after slumping the previous day on concern that elevated crude costs could hurt the global economic recovery.
Crude futures sank yesterday following weak Chinese and European manufacturing figures, and also after France said industrialised countries were considering the release of crude stockpiles.
But the stand-off between the West and crude producer Iran continues to be a key factor affecting oil prices.
US President Barack Obama declared today that tension with Iran and "uncertainty" in the region was adding a $20 or $30 premium to oil prices, pushing up petrol prices for vehicle owners in the US.
The US pushed this week for a tough new set of sanctions on Iran aimed at pressing the state over its nuclear programme, penalising foreign financial institutions over transactions with Tehran's central bank which handles the country's oil sales, its key export.
Iran has threatened to shut the strategic Strait of Hormuz - a conduit for a fifth of the world's oil supply - if it faces additional economic sanctions from the West for its controversial nuclear programme.
