London, April 19:

World crude oil prices rose to a fresh record above $72 a barrel. Oil prices have been rising rapidly over the past week in response to growing tension between the west and Iran over the latter’s nuclear programme.

The Automobile Association (AA) said prices at the pump were close to records in September. The motoring group said further rises lie ahead since increases in crude take several weeks to feed through fully.

British Airways announced it was raising its fuel surcharge on long-haul flights to GBP35 each way from GBP30.

Financec minister Gordon Brown responded by repeating his call for dialogue between oil producers and consumers and for greater clarity about demand and supply. In a speech in New York this week he will urge consuming countries to invest in alternative sourcesof energy. ‘’With the trebling of oil prices over three years, the demand is for a supply of energy that is secure, stable and sustainable.’’ Oil prices have surged from $20-$30 a barrel since 2003 and are not far short of the record high of just over $80 a barrel, in real, inflation-adjusted terms, hit in 1980 after the Iranian revolution.

Yesterday North Sea Brent crude shot above $72 a barrel for the first time to set a high of $72.20 before dropping back slightly. US light crude futures jumped to $70.88 a barrel, above last autumn’s record of $70.85 which followed damage to US oil facilities from Hurricane Katrina.

Oil prices have been volatile since summer but have fallen as low as $55 a barrel. Recently they have been rising, driven by demand from a robust world economy, especially China, and fears over supplies from countries such as Nigeria and now Iran, which last week declared it had enriched uranium to the level used in power stations.

Yesterday president Mahmoud Ahmadinejad said Iran would defend itself against any attack - a veiled reference to reports that the US had considered military action against Iran to prevent it producing nuclear weapons. ‘’Fear is the driver and remains so,” said Kyle Cooper, an analyst at IAF Advisors in Houston. ‘’It is not considered likely that any oil flow from Iran is disrupted, but it is possible.”

Iran is a large oil producer and an important member of the producers’ cartel Opec. It pumps nearly four million barrels a day, about 13 per cent of the Opec total, and any disruption could push oil prices sharply higher. Jim Wood Smith, head of research at Christows, said prices could easily hit $80 a barrel in the near future.

‘’It is likely that the Iranian situation will drive price higher yet, but this may well prove the final spike.’’ The US oil capacity taken out by Hurricane Katrina would come back on stream this year which, along with investment in new capacity, could push prices lower.

Experts are divided about where oil prices might go from here, since there are so many geopolitical uncertainties and because oil markets have seen a flood of speculative capital from investors seeking better returns than from shares or bonds.