Oil Risk Premium Rising on Iran Concerns

By Sharon Epperson, CNBC Senior Commodities Correspondent

NEW YORK (CNBC) --The risk premium due to Iran could be contributing as much as $15 to $20 a barrel to global oil prices, according to some analysts and traders.

Brent crude oil futures , the global benchmark for crude oil price, topped $124 a barrel Thursday morning -- the highest price since last May.

The concern that Iran will retaliate against sanctions imposed by Western nations and close the Strait of Hormuz -- a vital waterway that carries about 20 percent of the world's oil supply -- is a major factor in the rise in Brent futures.

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"Iran slamming the door on the [International Atomic Energy Agency] inspectors as hard as they did was a jolt, followed by the statements from the Supreme Leader, the oil market is responding to a hardening of positions, to the increasing sternness of the faceoff," said Daniel Yergin, chairman of IHS CERA.

Representatives from the IAEA arrived on Monday for talks on Iran's disputed nuclear program. But, on Wednesday the U.N. nuclear watchdog said it has failed to secure an agreement with Iran and that the Islamic Republic has rejected a request to visit a key military site.

Iran's Supreme Leader Ayatollah Ali Khamenei rejected accusations that Iran is pursuing a nuclear weapon, and insisted the country's policy would not change despite ramp-up sanctions.

Timeline of Oil Price Surge:

November 21, 2011: Brent crude futures were trading around $105-$106 dollars in late November when French President Nicholas Sarkozy started talking about an embargo of Iranian oil by the European Union.

His proposal came after the International Atomic Energy Agency issued a report on November 8, noting "serious concerns" about Iran's nuclear activities.

January 3, 2012: Brent crude prices started the new year nearing $110 a barrel, fueled by the United States promised sanctions targeting Iran's central bank and financial sector as well as renewed interest in this global benchmark contract by major commodity indices.