The price of reference Brent North Sea crude oil for delivery in August climbed by 60 cents to $36.90 per barrel in late morning deals in London, the highest level since 3 June.
New York's benchmark contract, light sweet crude for August delivery, increased by 94 cents to $39.33 in pre-opening electronic trading.
The US market was shut on Monday for the Independence Day long holiday weekend.
Prices had already been rising in recent days following weekend pipeline blasts in Iraq, a crisis at Russian energy giant Yukos and OPEC (Organisation of Petroleum Exporting Countries) signals that it could postpone a planned output hike.
The crisis at the Russian oil giant
Yukos is adding to supply worries
OPEC ministers have said the group could delay a scheduled production increase when it meets on 21 July. "Oil prices are very strong on the back of the things we knew yesterday, (such as) Iraq and Yukos," GNI-Man Financial trader Robert Laughlin said on Tuesday.
"But we are also up this morning on the back of the Nigerian oil workers who are threatening to vote industrial action at Total and ExxonMobil's production rigs," he added.
Meanwhile, in Baghdad, an Oil Ministry official said Iraq's oil exports would be restored to previous levels in the next four to five days as technicians repair a breach in the country's southern oil pipeline network.
are busy repairing the damage to the
Iraqi Oil Ministry official
"Technical teams are busy repairing the damage to the 107cm pipeline and it will take four to five days before it is operational again," the official said on condition of anonymity.
He said the damage to the pipeline, which occurred on Saturday, had cut exports from the southern terminals of Basra by half from their daily average of about two million barrels.
The official said the damage to one of the main pipelines connecting the oilfields to the export terminals was caused by "smugglers who wanted to steal crude so that they could sell it on the black market".