Oil prices go up amid simmering tension

In morning trade, New Yorks main contract West Texas Intermediate light sweet crude for February delivery advanced 47 cents to $100.12 a barrel.Brent North Sea crude for February was seven cents higher at $108.08 a barrel.A showdown between Iran and the United States over Tehrans threats to close the strategic Strait of Hormuz to oil tankers is the main factor influencing short-term crude prices, analysts said.Its a cat and mouse game, said Jonathan Barratt, Sydney-based chief executive of Barratts Bulletin (barrattsbulletin.com), an independent commodity research firm.There is still a risk premium that will be bought into the market, he told AFP.The United States said Thursday that Iran had exhibited irrational behavior by threatening to close a major oil shipping lane it also needs.Weve seen quite a bit of irrational behaviour from Iran recently, State Department spokeswoman Victoria Nuland said when asked about Tehrans threat to shut down the Strait of Hormuz, a critical passage for more than a third of the worlds tanker-borne oil.One can only guess that the international sanctions are beginning to feel the pinch, and that the ratcheting up of pressure, particularly on their oil sector, is pinching in a way that is causing them to lash out.The United States and the 27-nation European Union are considering new sanctions aimed at Irans oil and financial sectors. But EU governments have been divided over whether to impose an embargo on Iranian crude.Iranian Vice President Mohammad Reza Rahimi has warned that not a drop of oil will pass through the Strait of Hormuz if the West adopts sanctions on Irans oil exports in a bid to curb its nuclear ambitions.The closure could cause havoc on world oil markets, disrupting the fragile global economy, although analysts say the Islamic republic is unlikely to take such drastic steps as it relies on the route for its own oil exports.