Oil hits new highs after fresh Middle East tension

BRENT crude oil prices surged to near two-and-a-half year highs yesterday as fresh tensions between Israel and Iran added to spreading unrest in the Middle East.

Israel’s foreign minister, Avigdor Lieberman, said two Iranian warships planned to sail through the Suez canal en route to Syria and called the move a “provocation”, sending up prices in morning US trade.

Later, the ships were identified by an Israeli newspaper as a frigate and a supply vessel, which would not present a significant danger to the Jewish state. Israel’s state-funded television said Lieberman, a far-right partner in the conservative coalition, had spoken out of turn as the Defence Ministry “had preferred to ignore” the ships’ approach. Brent crude posted its highest close since September 2008, settling up $2.14 at $103.78 a barrel after rising as high as $104.52. US crude settled up 67 cents at $84.99, rising after three days of losses.