Crude oil prices have been steadily rising since the last New York trading on Monday, gaining 3 percent to peak at $103.06 a barrel by 12:00 GMT on Tuesday.
Oil prices have been vulnerable lately due to mounting tensions over Iran’s nuclear programme and unrest in Nigeria.
Tension with the West was even more heightened by news that Iran has sentences an American citizen to death for spying, angering the US and Europe and undermining expectations that diplomacy could avert further sanctions.
Iran has threatened to shut the Strait of Hormuz, the world’s most important oil export route.
Iran is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia and produces 3.5 million barrels per day (bpd) of crude. The EU imports about 500,000 bpd from Iran.
However, while threats to supplies supported oil prices, economic weakness in Europe will limit gains.
The euro rose on Tuesday after hitting a 16-month low versus the dollar on Monday. Investors remain concerned about the outlook for the region’s economy and banks and the prospects for government debt sales.