It is back within sight of its record high reached a week ago of 75.35 dollars.

In London, the price of Brent North Sea crude for June delivery added 1.87 dollars to finish at 73.89 dollars a barrel.

James Williams, an economist at WTRG Economics, said the oil market remained consumed about jitters over Iran with the United States and its allies pushing for UN sanctions against the major crude producer.

"When you add that on top of the loss of a fifth of Nigerian production, Bolivia's move toward the Venezuelan model of total control over oil produced by foreign companies, and the (US) summer driving season staring us in the face, it is easier for prices to go up than down," he said.

Bolivia's left-wing President Evo Morales threw a new dimension into oil market fears Monday by issuing a formal decree to nationalise crude and natural gas resources.

Bolivia has the second-highest natural gas reserves in Latin America, behind Venezuela. It has an estimated 54 trillion cubic feet of natural gas reserves, according to official data.

The measure is expected to affect about 20 foreign oil companies, including Spain's Repsol, Petrobras of Brazil, Britain's BP and British Gas and French group Total.

As army troops took control of oilfields, Morales said foreign energy companies would have to agree new contracts with Bolivia's state-run oil firm within 180 days.

Oppenheimer analyst Fadel Gheit, however, said the Bolivian announcement would have a limited impact on oil futures as the country's crude output is "relatively small".

Bolivia produces 42,000 barrels of oil per day, out of a world total of 84 million barrels, and uses all of that for domestic consumption rather than export.

Bill Farren-Price, deputy-editor of the Cyprus-based Middle East Economic Survey, agreed that Bolivia was a relatively small player in the world oil market. But he said the nationalisation formed part of a bigger picture.

"High oil prices have emboldened resource-rich governments to act in the same way that we have seen Iran challenging the West over its nuclear programme and Venezuela's President Hugo Chavez carrying out a very similar manoeuvre regarding international oil companies there," he said.

"It ratchets up the temperature a little bit, it ratchets up the international tension in the oil industry at large. I think it can only be supportive of high prices."

Iran remained the biggest factor driving oil prices, traders said,

Diplomats from the five permanent UN Security Council members and Germany were to meet in Paris Tuesday, following a report by the UN atomic watchdog Friday that confirmed Iran has ignored demands to freeze uranium enrichment.

"It's not so clear that the international community is going to be able to move quickly on the problem this week, as the consequences of sanctions will clearly be disastrous to the market," Fimat analyst Mike Fitzpatrick said.

Analysts fear that Iran -- the second-biggest member of the Organisation of Petroleum Exporting Countries after kingpin Saudi Arabia -- could respond to any UN sanctions by curtailing its exports.

The Islamic republic produces four million barrels of crude per day, around half of which is exported.

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