LONDON (AFP) -- Oil prices slipped from last week's record peaks but losses were capped by continued concerns over Iran and North Korea, traders said.

New York's main contract, light sweet crude for delivery in August, fell 18 cents to 73.91 dollars per barrel in electronic deals before the official re-opening of the US market.

The contract had hit a historic 75.78 dollars last Friday owing to simmering geopolitical tensions, particularly over Iran and North Korea.

Brent North Sea crude for August delivery lost 12 cents to 73.13 dollars per barrel in electronic trading on Monday. It had touched a record 75.09 dollars on Friday.

"The market is probably still anxious about developments in North Korea and the Middle East," said Mark Pervan, an analyst with Melbourne-based Daiwa Securities.

"Oil premiums won't be washed out in the short-term."

The dispute between Iran -- the world's fourth-largest crude producer -- and Western powers over its nuclear program is a key geo-political factor concerning the market, dealers said.

Iran had said on Sunday that it would take until the second half of August to respond to an international offer of incentives in return for the suspension of sensitive nuclear work.

The United States has meanwhile threatened UN action against the Islamic republic if it fails to heed international concerns.

Tehran is facing mounting international pressure to give a clear answer before the Group of Eight (G8) summit from July 15-17.

"Oil is a political commodity and could be used against the West. There may be developments (in negotiations) with Iran but things are still fairly unresolved," Pervan said.

Another worry for traders is North Korea, which has kept the market volatile.

Although the Asian power is not an oil producer, its controversial missile tests last week jangled international tensions.

North Korean leader Kim Jong-Il vowed no compromise and said he was braced for "all-out war" as tension mounted Sunday before a UN vote on whether to impose sanctions on the communist state for its missile tests.

The Security Council, still deadlocked on action against the reclusive nation, was to decide on Monday when to vote on the draft.

Added to the picture, oil prices are also supported by buoyant demand for motor fuel in the United States amid the ongoing peak-demand driving season where many Americans hit the roads for vacations.