The New Nation - Internet Edition

BBC Online

Crude oil prices have surged to near $144 a barrel ahead of a meeting of oil-producing nations in Madrid to discuss soaring prices.

General concerns over global supplies and escalating rhetoric between Iran and Israel have pushed prices to fresh highs in recent days.

An emergency summit held in Jeddah earlier this month has done little to take the heat out of the market.

US light, sweet crude rose as much as $3.46 to $143.67 in European trade. This was ahead of the $142.99 all-time high reached on Friday.

In London, Brent crude climbed as high as $143.81 a barrel, and was later trading up $3.44 at $143.75 a barrel.

A combination of the weak US dollar, surging demand and concerns about supply disruptions in the Middle East and Africa have forced prices up more than 40% this year.

In the latest war of words between Israel and Iran about the latter's nuclear intentions, a commander of Iran's revolutionary guard was quoted as saying that it could take control of the vital Strait of Hormuz waterway if attacked by Israel.

More than 60% of the world's oil is transported through the Strait, making its smooth functioning vital to the global oil markets.

Recent commitments by Saudi Arabia to increase production have seemingly done little to assuage concerns about the global availability of oil.

Measures to combat high prices and to increase long-term supplies are top of the agenda at the World Petroleum Congress in Madrid, which begins on Monday.

Ministers from Opec nations will again come under pressure to boost output, although many officials continue to blame market speculation from the rise in prices this year.

Many leading oil producers, which are also attending the meeting, take a different view.

"This is not a speculative bubble," BP chief executive Tony Hayward told the meeting.

Alluding to differences of opinion among Opec members about how much oil to pump and what should be a reasonable price for oil, Hayward said the industry's "problems are above ground not below it".

Experts added that the meeting must address where long-term growth in energy supply should come from and the environmental costs involved.

"Increasing population growth, energy intensity and globalization has led to a phenomenal rise in the use of energy," said Randy Gossen, president of the World Petroleum Council.

"The challenge for our industry is to ensure continuous, affordable and reliable energy supply in a sustainable, transparent and ethical, environmentally sound manner."