"The EU embargo on Iranian oil could be be brought forward, and this is supporting the increase in crude prices," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.
European Union foreign ministers are due to meet on January 23 to finalise the timeline for an embargo on Iran as part of fresh sanctions over the country's alleged attempt to build an atomic bomb. France is seeking a faster implementation, while many of the eurozone's troubled economies that depend on Iranian oil are seeking a six-month delay.
Iran has insisted that its nuclear programme is for peaceful purposes. Tensions were further stoked as Tehran warned Gulf states not to make up for any shortfall if its oil exports are cut as a result of new sanctions. If Arab neighbours compensate for a looming EU ban on Iranian imports, "we would not consider these actions to be friendly," Iran's representative to OPEC, Mohammad Ali Khatibi, warned in remarks published on Sunday.
In comments recorded before Tehran's warning, Saudi Arabia's oil minister told CNN that the world's top crude producer is ready to make up for any shortfall in Iran's oil exports.