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Oil prices leap on Gulf incident
Date: Friday, March 23 2007

Oil prices leap on Gulf incident

Oil prices have risen to their highest level this year after 15 British Navy personnel were seized at gunpoint by Iranian forces in the Gulf.
The incident caused an immediate reaction in the markets, with a barrel of light, sweet crude rising to $62.65 - its highest mark since December.

In London, Brent crude rose to $63.68 a barrel, near a four-month high.

A major oil producer, Iran's volatile relationship with the international community is a worry for investors.

One analyst described Friday's incident as "potentially explosive" as far as oil was concerned.

"This sort of incident, and subsequent mishandling, is just the sort of thing that fuels concerns about a global conflagration over oil," said Fimat analyst John Kilduff.

The long-running dispute over Iran's nuclear ambitions and fears this could lead to a military confrontation with the US helped underpin oil prices for much of last year.

Earlier this month the UN Security Council drafted a new sanctions package against Iran over its refusal to stop enriching uranium, which Iran claims is merely for civilian use.

Tehran has warned that it will halt oil exports if it is attacked.

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[Proofreader's note: this article was edited for spelling and typos on March 26, 2007]

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