Oil Price Hits Year-High on Iraq War Fear

["Mazine Kessaissia" <mazine.kessaissia@mail.utexas.edu>]

LONDON (Reuters) - Oil prices surged to their highest levels in a year on
Friday on mounting fears of war in oil exporter Iraq after U.S. and British
planes bombed targets there on Thursday.

President Bush rang heads of state in France, China and Russia ahead of what
some British media are dubbing a "war summit" this weekend with ally Prime
Minister Tony Blair.

International benchmark Brent crude oil, which has already climbed more than
a third this year on war fears, jumped $1.09 to $28.75 a barrel in London,
its highest level since September last year.

U.S. crude soared $1.05 to $30.03, also close to a year-high.

"The war drums are pushing the price higher," said Leo Drollas of the Center
for Global Energy Studies in London.

Traders fear that a massive U.S. attack on Iraq would sow chaos in the
Middle East Gulf region, home to two-thirds of the world's oil reserves.

Former Saudi Oil Minister Sheik Yaki Yamani predicted earlier this week that
Saddam would respond to any full-scale U.S. attack by firing at Saudi Arabia
and Kuwait, sending oil to $100 a barrel.

"There is a lot of uncertainty, not just about Iraq but the surrounding
countries," said Yasser Elguindi, a director at consultants Medley Global
Advisers in New York.