LONDON (AFP) – Oil prices fell slightly on Tuesday amid tensions between key crude exporter Iran and the West over the Islamic republic’s atomic programme.
New York’s main contract, light sweet crude for delivery in November, slipped 14 cents to 66.70 dollars a barrel.
London’s Brent North Sea crude for November lost 13 cents to 65.41 dollars a barrel.
Crude futures had risen earlier in Asian trading, boosted by geopolitical tensions and a rebound for US equity prices on Wall Street overnight, traders said.
Iran, the world’s third biggest crude exporter, test fired missiles on Monday saying it could reach targets inside Israel and immediately drew swift condemnation from the United States and other Western nations.
Washington said the missile tests were “provocative” and urged the republic to agree to “unfettered access” to its newly revealed enrichment plant.
Washington and regional ally Israel have not ruled out a military option to stop Tehran’s nuclear drive, which the West says is aimed at making nuclear weapons while Iran says it is solely for peaceful ends.
“Any consideration of an outbreak of hostilities immediately calls into focus the Strait of Hormuz, adjacent to Iran, through which flows 25 percent of the world’s oil supply,” said John Kilduff of MF Global.
“The escalation of tensions with Iran underlines how another element, geopolitics, of the many that caused prices to peak in 2008, can resurface suddenly,” he warned.