Oil prices climb on Iran threat

Oil prices rose nearly two per cent on Tuesday after Iran again threatened to cut off supplies to Europe.

Benchmark US crude rose by US$1.56 to US$98.47 per barrel in New York afternoon trading.

Brent crude, used to price foreign oil varieties, rose by US$1.14 to US$117.07 per barrel in London.

Iranian lawmakers are pushing a plan to halt crude exports to Europe before the European Union (EU) begins an oil embargo this summer.

Iran is the world's third-largest oil exporter and about 18 per cent 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.

In other energy trading, heating oil rose four cents to US$3.21 per gallon.

Gasolene futures rose by two cents to US$2.95 per gallon.

Natural gas futures fell by eight cents to US$2.47 per 1,000 cubic feet.

- AP