Oil Mixed in Asia as Iran Tensions Heat Up

Oil was mixed in thin year-end Asian trade Wednesday as Iran warned it would lock down the crucial Strait of Hormuz if the West imposed sanctions on its oil exports, analysts said.

New York's main contract, light sweet crude for February delivery, gained two cents to $101.36 per barrel in the afternoon.

Brent North Sea crude for February delivery shed 20 cents to $109.07.

"The thin volume contributed to price volatility," said financial analysis website easyforexnews.net in a report.

But crude markets remained supported by Iranian threats of closing down the Strait of Hormuz in the event of Western sanctions, senior energy analyst of PFGBEST Phil Flynn said in a report.

"The vice president of Iran says if there are sanctions they will close the straits," the report said.

"Oil that has been held in check by the uncertain outlook for Europe may focus on threats to supply as we start the new year."

Iranian Vice President Mohammad Reza Rahimi made his threat Tuesday as Tehran conducted navy war games near the Strait of Hormuz, at the entrance of the oil-rich Gulf where 40 percent of the world's oil transits.

Several Western states are considering oil sanctions against Iran over its nuclear program, accusing it of seeking to develop nuclear weapons.

The strait links the Gulf, bordered by petroleum-rich states such as Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, with Oman.