Brent crude oil rose above $116 per barrel to a six-month high on Tuesday as threats from Iran to ban exports to some European states stoked supply concerns, overshadowing fears that Greece's debt crisis was worsening.

Brent's premium to U.S. crude oil stayed around $19 a barrel, near its highest since November, as a severe wintry weather spread across Europe and as simmering tensions between the West and Iran escalated. But Greece's wrangling over a bailout fund helped cap those gains.

Front-month Brent touched $116.70 , up 77 cents and its highest since early August, before easing back to trade around $115.68 a barrel by 4:20 a.m. ET, down 25 cents. U.S. oil slipped 30 cents to $96.61.

The geopolitical events surrounding Iran and the Middle East and the severe cold weather sweeping across Europe are providing support for Brent, said Victor Shum, senior partner at oil consultancy Purvin & Gertz. We continue to see more upside risks for oil, but Europe's debt crisis will weigh.

Supply worries and Europe's cold weather offset a slightly firmer dollar index .DXY. A stronger dollar typically weighs on oil as it pressures dollar-denominated commodities by making them more expensive for consumers using other currencies.

Iran's parliament said on Tuesday it was ready to impose a ban on oil exports to some European states, the country's English-language Press TV reported, pre-empting a ban announced by the Union slated to begin from July 1.

President Barack Obama tightened sanctions on Iran another notch, the White House said on Monday, targeting its central bank and giving U.S. banks new powers to freeze assets linked to the government.


Iran responded to the announcement by calling the decision an antagonistic move.

Analysts said the widening premium for Brent over its U.S. counterpart was largely due to supply fears.

Without Iran and other worries over supply, Brent would be more likely to follow U.S. crude, said Carsten Fritsch commodities analyst at Commerzbank in Frankfurt.

Perhaps $6 to $8 of the Brent premium is attributable to supply risks, mostly concerns about Iran but also worries about supply disruptions from Sudan and Nigeria.

South Sudan and its northern neighbor Sudan, from which it separated in July, are locked in a row over disentangling their oil industries. South Sudan took three-quarters of the oil production but needs to pay for using northern pipelines and the Red Sea port of Port Sudan. South Sudan has shut down its entire output of 350,000 barrels a day in response to the row.

Clashes in Nigeria are also worrying investors about possible supply disruptions after a pipeline belonging to Italy's Eni (ENI.MI) was blown up.

Escalating violence in Syria is adding to concerns over the stability of the Middle East. Heavy bombardment of the Syrian city of Homs resumed on Tuesday after at least 95 civilians were killed on Monday in an offensive to put down a popular revolt against President Bashar al-Assad's rule.

Greece's resistance to a set of strict conditions attached to a bailout fund helped weaken stock markets on Tuesday. Most other risky assets also paused as investors watched if the restructuring talks would be resolved.

Failure to strike a deal to secure the rescue fund risks pushing Athens into a chaotic debt default and threatens to trigger contagion across the whole region.

U.S. oil prices could also come under pressure due to expectations that stockpiles in the world's largest oil consumer rose last week for the third straight time on higher imports and lower refinery runs.

On average, analysts projected domestic crude inventories would rise by 2.6 million barrels in the week to February 3. Industry group the American Petroleum Institute is slated to issue the stocks data later in the day.