World oil prices sank today after the Norwegian government acted to end an oil workers' strike which disrupted supplies to the market.

Brent North Sea crude for delivery in August dived $1.75 to $98.57 per barrel in morning deals in London.

New York's main contract, light sweet crude for August shed $1.08 to $84.91 a barrel.

Analysts said that a resumption of crude production in Norway after the government stepped in to end an offshore workers' strike was pulling prices down.

Authorities intervened just minutes ahead of a threatened lockout of Norway's oil production sites, and ended a 16-day strike by hundreds of workers in western Europe's largest oil and gas producer.

The workers wanted employers to reconsider a decision not to grant special benefits to those who wish to retire at the age of 62, three years before the legal retirement age in the field and five years before the country-wide age.

The lockout, which was to have been enforced from midnight last night, had loomed after talks between employers and unions failed to end the strike which began on June 24.

Norwegian old giant Staoil, the group most affected by the strike, said in a statement that it was "preparing to resume production at installations that have been affected".