War fever drove US oil prices to a new 19-month high today as dealers took fright at the growing threat of a US assault on Iraq.
Benchmark US crude oil jumped 41 cents to $30.25 a barrel by late morning in London after setting a high of $30.48, its highest level since February last year.
North Sea Brent gained 37 cents to $28.80, close to its highest level in a year.
Dealers said Baghdad's decision to reject any new UN resolution on Iraq, combined with Israel's siege of Palestinian leader Mr Yasser Arafat's Ramallah headquarters drove the gains.
"The US wants a new resolution and Saddam is rejecting that - that's bullish. With Ramallah as well the tension is getting very high," said Mr Gary Ross, head of PIRA Group consultants in New York.
Sustained tension in the Middle East, which pumps a third of the world's crude, has already driven oil prices up 50 per cent this year.
Dealers said the threat of a US-led strike on Iraq grew after Baghdad vowed on Saturday to reject any new Security Council resolution, which differed from an agreement reached with the UN secretary-general to readmit weapons inspectors.
The Middle East-dominated OPEC cartel has said it will move to make up for any supply disruptions but could not guarantee to quell a speculative oil price rise driven by war fears.