Brent crude surged to fresh highs in mid-morning trading after US and British planes struck targets in Western Iraq yesterday.
At 10.35 am, October-dated benchmark Brent crude contracts traded up 72 cents on the day at $28.38 per barrel, the highest front-month price since September 2001.
"There's a lot of tension in the market following the reports of US/UK attacks on Iraq, possibly with up to 100 aircraft," said trader Mark Keenan at ABN Amro.
"That has combined with the meeting between [Tony] Blair and [George] Bush this weekend, which is being seen by many as an establishment of war protocols," he said.
"Certainly in this kind of climate, people are extremely reluctant to go away for the weekend short, and that's why the price is so high".
PA