The tension between the UK and Iran over the seizures of oil tankers in recent weeks pushed the price of oil higher, and helped boost the shares of major oil companies.
Brent cruse, the global benchmark, rose by a significant 82c, or 1.3%, to $63.30 a barrel, building on its gains late last week when the dispute further escalated after Iranian forces seized a British-registered oil tanker.
Prices may have risen further but for the uncertainties in oil markets surrounding the world supplies after a slowdown in the world economy.
The trade wars unleashed between the US and China has raised serious questions about the world’s consumption of oil, as the global economy slows.
The Ftse 100 in London, which is rich with oil major companies, was propped up during the session by the advance of the oil majors before succumbing to jitters over the central banks’ plans.
Shares in BP rose over 1% to pare its losses to 2% over the past year.
“Aside from some gains for crude oil stocks as energy prices rise thanks to the situation in the Gulf, the main focus on an otherwise quiet day is what the ECB and the Fed will do,” said online broker IG.
Meanwhile, world oil supplies may be boosted as Libya pumps more oil as the North African supplier’s biggest field restarts following a brief halt.
A valve in the pipeline that carries crude from the Sharara field to the Zawiya refinery has been reopened and tested, said the state-run National Oil Corporation (NOC).
The stoppage occurred late last week, and authorities lifted a short-lived force majeure on loading Sharara crude at Zawiya.
Production at Sharara, in Libya’s southwest, had returned to its normal level, according to a person familiar with the situation.
The field had been producing 290,000 barrels a day and its closure had reduced overall daily production in the country with Africa’s largest proven oil reserves to about 1 million barrels, the Opec member’s lowest since February.
An oil tanker, Monterey, has been waiting at Zawiya port to load 700,000 barrels once force majeure is lifted, a source said.
The NOC condemned the “as yet unclaimed deliberate act of sabotage”.
Sharara has experienced brief shutdowns in recent years as some of Libya’s myriad armed groups press demands.