Oil hits record $72 on Iran fears

Oil hit a record $72.20 a barrel on Tuesday as Iran defied world pressure to halt its nuclear program, raising new fears of a cut in supplies from the world's fourth biggest crude exporter.

In London, North Sea Brent crude oil jumped 74 cents to set the new all-time high as Iran and the West exchanged increasingly sharp words over the Islamic Republic's determination to push ahead with uranium enrichment.

U.S. crude oil climbed to $70.88, smashing through its previous record of $70.85.

Prices fell back slightly in later trade and by 1630 GMT, Brent, an indicator of the cost of Europe's oil imports, was up 40 cents at $71.84, while U.S. crude was 30 cents at $70.70. High U.S. oil stocks have helped to push U.S. crude below Brent.

"The current shoot up we are experiencing is as a result of the Iran problems and it's not helped by the flare up between Israel and the Palestinians," OPEC's president Edmund Daukoru said on Tuesday.

"But mainly it's the threatening statements being made against Iran as a result of its nuclear program," added Daukoru, who is also Nigeria's oil minister.

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