Brent oil trading at $124 as tensions over Iran continue to push prices higher

Brent oil futures open Monday’s trading session hanging near $124 a barrel as tensions over Iran continue to push oil prices higher, with comments over the weekend from the US president that may further fuel problems that surround the Middle East and oil supply.

Latest Brent Oil Price

In London, Brent crude oil futures for April 2012 delivery was trading at $123.68 a barrel, 07.50 GMT today on the ICE Futures Exchange.

Tensions between the West and Iran have sent oil prices rising, as Tehran continues with its nuclear ambitions despite sanctions from the US and Western Europe. The chilly standoff etched up a notch when President Obama said the US would defend Israel should the situation deteriorate into armed conflict.

“I will not hesitate to use force when it is necessary to defend the United States and its interests,” Obama said, according to the Associated Press.

EU Oil Ban

In late January the EU imposed an oil embargo on Iran, with foreign ministers meeting in Brussels ruling that no further oil contracts could be struck between member states and Iran, though existing delivery deals would be allowed to run until July.

However, the effectiveness of an EU embargo on Iranian oil imports has been cast into doubt by growing evidence of a rise in shipments from the Islamic republic arriving in the Mediterranean.

While an EU embargo on Iranian crude is already affecting global oil prices, it is the threat of an interruption in supply through the strait that is of greater concern to oil traders and economists.

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Brent oil trading at $124 as tensions over Iran continue to push prices higher