London: Brent crude rose Monday, briefly hitting an eight-month high above $121 a barrel, as Iran halted exports to British and French companies ahead of a European Union embargo.
Policy easing by China and hopes for a Greek bailout also buoyed prices.
Brent crude was trading $1.12 higher at $120.70 a barrel by 1105 GMT, having hit a session high of $121.15 earlier. The level was the highest since mid-June last year.
In euro terms, Brent crude is nearing its record high hit in summer 2008.
US crude was up $1.75 to $104.99 a barrel, after earlier rising to $105.21 a barrel, its highest since May, 2011. Volume was moderate due to a public holiday in the United States.
Opec's second largest producer, Iran, ordered a halt to its oil sales to British and French firms on Sunday in retaliation against tightening EU sanctions as its ties with the West remained strained over its disputed nuclear programme.
But the announcement came as European oil buyers had already made big cuts in purchases from Iran months ahead of the sanctions.
"Banning the tiny quantities of exports to the UK and France involves very little risk for Iran — indeed quite the opposite, it catches the headlines and leads to a higher global oil price, which is something Iran is very keen to encourage," said Caroline Bain, commodities analyst at the Economist Intelligence Unit.
Fears of supply disruption in Iran and upbeat economic data from the world's largest oil user, the United States, have pushed oil prices up over the past month.
J.P. Morgan Chase raised its 2012 price forecast for Brent crude by $6 to $118 a barrel on supply risks and rising economic growth. It also raised its forecast for 2013 to $125 a barrel, up from $121.
Geopolitical issues in Iran, Syria, Sudan/South Sudan, Nigeria and elsewhere are creating increased demand for crude stocks, analysts led by Lawrence Eagles said on Sunday.
