With the prospect of Iran standing defiant on its nuclear work and disregarding UN sanctions, U.S. light crude for September delivery went up by 49 cents to $71.63. London Brent crudefor October climbed to $72.73 a barrel.
The UN has proposed a second deadline of Aug. 31 for Iran to halt its uranium enrichment or face punitive action, but it seems that with the survival of Hezbollah, Iranian confidence has been bolstered setting the stage for a confrontation over nuclear development.
Traders fear that Iran could withhold exports of as much as 2 million barrels per day in retaliation to any sanctions imposed by the UN.
The production boost from the Prudhoe Bay oil field to half its normal capacity and the cease-fire in Lebanon have helped knock over 7 percent off oil prices but concerns remain over the fragility of the cease-fire and now the added worry over Iran's intentions.
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