NEW YORK, USA — OIL prices soared yesterday as tensions grew over key Persian Gulf oil shipments.

Benchmark crude jumped by US$4.13 ($406.46), or 4.2 per cent, to end the day at US$102.96 per barrel in New York.

Brent crude, which is used to price foreign oil varieties that are imported by US refineries, rose by US$4.75, or 4.4 per cent, to finish at US$112.13 a barrel in London.

Prices climbed as soon as exchanges opened for the first day of 2012 trading. Commodity prices tend to rise at the beginning of January as investors start the new year with a fresh round of trading. This year prices were driven up by heightened concerns that Iran might try to close the Strait of Hormuz in the Persian Gulf to oil tankers, if Western nations impose new sanctions.

Iran warned the US to stay out of the strategic waterway, where one-sixth of the world’s oil shipments pass every day. On Monday, its navy fired a cruise missile as part of a military exercise.

Military experts say Iran’s navy is too small to pose a serious challenge to the United States, but the missile exercise showed that it still has the ability to frustrate the international oil trade.

“A ship on the ocean is an obvious target,” said Michael Lynch, president of Strategic Energy and Economic Research. “Even the Iranians can hit one.”

The US and European nations are mulling further economic sanctions against Iran because of its nuclear programme. Doing that comes with some major economic risks, however. A stand-off with Iran could hurt the global economy, slowing oil supplies at a time when the world needs every drop. Global oil demand is expected to rise to a record 89.5 million barrels per day in 2012.