Oil prices climbed this evening after Iran again threatened to cut off supplies to Europe.
US crude rose by $1.56 to $98.47 a barrel in New York and Brent crude rose by $1.14 to $117.07 in London.
Iranian politicians are pushing a plan to halt crude exports crude to Europe before the EU begins an oil embargo this summer.
The EU embargo is part of a broader strategy by Western nations to pressure Iran to abandon a nuclear programme that the US and other nations believe is developing weapons.
Iran is the world's third-largest oil exporter and about 18% of its crude goes to the EU. When the embargo takes effect in August, experts predict Iran will make up for the lost business by selling more oil to China and India. European nations say they need time to find new suppliers. Iran is trying to speed up the process and force the EU to replace its oil sooner than expected.
On Monday, US President Barack Obama announced sanctions on Iran's central bank that will make it harder for Iran to sell its oil to other countries.
US oil prices had been on the decline over the past several trading days as supplies grew at the important Midwest distribution hub in Cushing, Oklahoma. The possibility of Iran stopping crude sales to Europe, and creating tighter supplies, boosted prices around the globe.
Commercial traffic resumes on Shatt al-Arab
Commercial traffic has resumed on the strategic Shatt al-Arab waterway after 31 years, with the official opening of a port for oil giant Shell, an Iraqi official said today.
Part of the 200 kilometre long waterway forms a section of the border with Iran. An unresolved boundary dispute was a major reason cited by now-executed dictator Saddam Hussein for the 1980-88 war with Iran, which resulted in the waterway's closing.
"The Shatt al-Arab is reborn again after being closed for 31 years," Mehdi Badah Hussein, the head of the joint committee to develop Majnoon oil field, said at a ceremony to open the port.
"There are other harbours on the Shatt al-Arab, but commercially, this is the first time Iraq succeeded in turning the Shatt al-Arab into a maritime passage which will help in transporting heavy equipment," Hussein said.
The journey up the Shatt al-Arab to the new port is about 80 kilometres and ships will pay customs fees in Umm Qasr to the south before heading to the new harbour.
A consortium of Anglo-Dutch oil giant Shell and Malaysia's Petronas signed a contract with Iraq in January 2010 to operate the enormous Majnoon field.
The port's main function is to facilitate the transportation of equipment to the massive Majnoon oil field. Iraq's income from oil sales jumped by nearly 60% in 2011 on the back of higher crude prices and increased exports, according to the oil ministry.
Oil sales account for the vast majority of Iraqi government income and around two-thirds of gross domestic product. The country exported an average of 2.1 million barrels of oil a day in 2011, according to Oil Minister Abdelkarim al-Luaybi.
