Oil held above $64 on Thursday, after achieving its highest close for over six months, as 15 British sailors remained in Iranian custody and oil consumers weighed the risks to oil flows from the Gulf.
Iran, the world's fourth biggest oil exporter, may delay releasing the only woman among the 15 if Britain displays "fuss and wrong behaviour," a senior Iranian official said.
U.S. crude was flat at $64.08 a barrel by 1135 GMT, after closing above $64 for the first time since September 11. London Brent was up 36 cents at $66.14.
Iran detained the British sailors and marines on Friday, shortly before the United Nations imposed new sanctions over the Islamic republic's nuclear program. The United States has been conducting naval exercises in the Gulf.
"Tensions are increasing between the main protagonists and they will persist even if the sailors are released," said Olivier Jakob, an analyst at Petromatrix in Switzerland.
"The current state of tension between the U.S. and Iran makes it probable that there will be other incidents and strategic plays until the next UN sanction review in 60 days."
Oil prices briefly spiked above $68 late on Tuesday on rumours of a clash between U.S. or British forces and Iran. London and Washington denied any confrontation.
(Reuters, 29/03/2007)