LONDON (AFP) -- World oil prices hit record peaks on Tuesday above 72.0 dollars in London and close to 71.0 dollars in New York as the market fretted over possible military conflict between the United States and Iran.

The price of New York's light sweet crude hit a historic high of 70.88 dollars per barrel, beating the previous. record 70.85 dollars set on August 30, 2005, when Hurricane Katrina had ravaged oil facilities on the U.S. Gulf Coast.

Also Tuesday, the price of Brent North Sea crude oil hit a record 72.20 dollars per barrel as the market feared that an attack on Iran could lead to a disruption of its oil exports.

Washington accuses Iran, the world's fourth biggest crude producer, of working secretly to build nuclear weapons under cover of a nuclear energy program it is developing with Russian assistance.

Iran denies this charge and says the program is strictly for producing nuclear energy.

Tensions over Iran come at a time of strong demand for energy.

The Organization of Petroleum Exporting Countries said Tuesday that global oil demand grew by almost one million barrels per day in 2005.

At about 1120 GMT New York's main contract, light sweet crude for delivery in May, had climbed 30 cents from Monday's close to 70.70 dollars in electronic deals before the market's official opening.

Brent crude for June delivery jumped 35 cents to 71.81 dollars in electronic deals.

Adjusted for inflation, current oil prices remain below levels reached after the 1979 Iranian revolution when they surged to upwards of 80.0 dollars per barrel in today's money.

"People are still concerned about Iran and potential military action," Global Insight analyst Simon Wardell said Tuesday.

"It looks like there's going to be a run towards 75 (dollars)," he added.

But he warned that prices could rocket to above 150 dollars per barrel should Iran retaliate to any U.S. attack by disrupting the world's busiest oil shipping lanes.

Because its shores line the narrow Straits of Hormuz, Iran could quickly hit both military and commercial shipping with missiles launched from land, air or sea as well as cripple maritime traffic with mines or sunken ships, analysts have said. "If they close the Gulf for a length of time to shipping, then certainly we could look at 150 dollars, probably higher."

London's Brent contract has been striking record highs since April 10 on market concerns that the United States might launch strikes at uranium enrichment facilities in Iran.

The U.S. administration said Monday that Iran's announcement that it was working on advanced P-2 centrifuges to enrich uranium was a further signal that the Islamic republic's nuclear program was not purely civilian.

Further fuelling tensions in the Middle East region was a suicide bomb attack in Israel's commercial capital of Tel Aviv late Monday that left nine people dead and dozens wounded, dealers said.

The blast -- the deadliest since a suicide bombing in August 2004 -- was claimed by the Palestinian militant group Islamic Jihad, which has been behind the most recent bomb attacks in Israel.

Victor Shum, a Singapore-based analyst with global consultancy Purvin and Gertz, said the attack and the Iranian row were reflective of the political volatility in the oil-producing Middle East, which has fuelled fears of supply disruptions in the event of a conflict.

"With all these events in the Middle East, prices hit the psychological level of 70 (dollars) and settled above it," he added.