Oil prices jumped to over $101 a barrel Tuesday amid concerns that rising tensions between Western powers and Iran could lead to crude supply disruptions.
By early afternoon in Europe, benchmark crude for February delivery was up $2.67 to $101.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 82 cents to settle at $98.83 in New York on Friday.
Global oil markets were closed Monday for the New Year's Day holiday.
In London, Brent crude was up $2.70 at $110.08 a barrel on the ICE Futures exchange.
On Monday, Iran test-fired a surface-to-surface cruise missile, part of 10-day naval maneuvers scheduled to end Tuesday. Iran's navy chief Adm. Habibollah Sayyari said the test showed the key oil passageway Strait of Hormuz is "completely under our control."