Oil prices have risen, hovering around $63 a barrel, after a dispute with Iran over 15 captured UK personnel.
Traders worry that the flow of Iranian oil could be disrupted
Tensions also rose following a UN Security Council vote on Saturday to impose harsher sanctions on Iran over the country's nuclear programme.
"Some political risk premium is coming back into oil prices," said Andrew Harrington at ANZ Global Resources.
US light crude oil gained 63 cents at $62.91 in New York while Brent Crude had climbed $1.27 to $64.45 earlier.
The rise pushes oil to its highest level this year.
Iran, which is the world's fourth-largest oil exporter, said the UK naval personnel were arrested on Friday in its territorial waters.
UK and US officials have denied this account, with Britain's Prime Minister Tony Blair calling their detention "unjustified and wrong".
"The situation in the Middle East has become much more uncertain and the risk of tensions intensifying has underpinned the rise in oil prices," said David Moore at Commonwealth Bank of Australia.
Prices were also pushed up following reports of problems at the fifth largest refinery in the US, owned by BP, in Indiana.
Additionally, oil traders are worried about the situation in Nigeria, where three abducted foreigners are still missing.
One Dutch citizen was abducted in Nigeria's oil capital Port Harcourt, while two Chinese nationals were kidnapped nine days ago in the south-eastern state of Anambra.