LONDON (AP) - Oil prices jumped back above $73 a barrel Monday after Iran's supreme leader threatened that his nation could jeopardize the world's oil supply if the West punishes Tehran over its nuclear program.
Light, sweet crude for July delivery rose $1.24 to $73.57 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. The contract had risen to $72.33 Friday following the kidnapping of eight foreigners working on a rig off the coast of Nigeria. The workers were released Sunday.
July Brent crude futures on London's ICE Futures exchange rose $1.41 to $72.44 per barrel. Gasoline futures gained more than 3 cents to $2.2300 a gallon (3.8 liters), while heating oil prices rose more than 4 cents to $2.0581 a gallon. Natural gas prices were up 13 cents to $6.750 per 1,000 cubic feet.
Iran's supreme leader Ayatollah Ali Khamenei - who has the final say on all state matters - told Western nations in a speech Sunday that ''If you make any mistake (punish or attack Iran), definitely shipment of energy from this region will be seriously jeopardized.''
Khamenei said the United States and its allies would be unable to secure oil shipments passing out of the Persian Gulf through the strategic Strait of Hormuz to the Indian Ocean.
Iran is the world's fourth-largest oil exporter and has the second-largest reserves in the Organization of Petroleum Exporting Countries.
''The price surge is a knee-jerk reaction to the remarks made by Iran's supreme leader,'' said Victor Shum, energy analyst with Purvin & Gertz in Singapore.
He noted, however, that Iranian President Mahmoud Ahmadinejad had indicated a breakthrough in negotiations was possible, but rejected a precondition to talks. Contrary to Khamenei's remarks, other Iranian officials have repeatedly ruled out using oil as weapon.
The kidnappings in Nigeria also reminded traders that the nation's oil supply is not secure.
''These geopolitical events support high prices in the near term,'' Shum said.
Oil prices gained last week despite rising U.S. inventories combined with an expected decision by the Organization of Petroleum Exporting Countries to leave its output quotas steady at 28 million barrels a day.
Saudi Arabia's Oil Minister Ali Naimi confirmed in an interview with the Wall Street Journal that his country's crude output has declined in recent months, but said it was due to a drop in demand and denied the kingdom is trying to limit supply.
OPEC President Edmund Daukoru, who is also Nigeria's petroleum minister, called Monday for the international community to work to solve the geopolitical tensions that help contribute to high oil prices.
''OPEC is not a political organization,'' he said. ''OPEC is committed to stabilization of markets.''
''Events such as Iran simply go to emphasize once again the need for dialogue and the need for a harmonized world view, particularly with regard to energy,'' he said.
The current high oil prices are primarily caused by bottlenecks such as a lack of refining capacity, Daukoru said. Factors including inflexibility in gasoline specifications from country to country, geopolitical tensions and hedge funds also play a role, he added.
Daukoru also said Nigeria takes seriously the kidnappings of foreign oil workers in the country.
''We condemn any form of hostage-taking as officials and we'll do everything possible to stop it,'' he said.
Unrest has plagued Nigeria's oil-rich southern delta region for years, and in recent months armed militants have stepped up a campaign against the oil industry, blowing up oil pipelines and kidnapping foreign workers.
Daukoru tried to calm investors, saying, ''There's absolutely nothing to fear.'' He called the incidents ''an expression of anxiety as to the pace of development.''