In London on Tuesday, North Sea Brent crude oil jumped 74 cents to $72.20 a barrel as Iran and the West exchanged sharp words over the country's determination to push ahead with a nuclear programme.
US West Texas Intermediate crude oil got to $70.88, passing its previous high at the end of August of $70.85 and up 35 cents from Monday's closing price of $70.40, another record.
Analysts said oil prices were likely to go up further as long as geopolitical risks in Iran and Nigeria posed threats to supply, at a time when global demand remains strong and supplies tight.
Experts say crude oil production is barely keeping up with rising global demand, leaving a small margin for error if there is a prolonged supply interruption.
Traders are anxious that US-led efforts to stop Iran - Opec's second-largest member - from pursuing a suspected nuclear weapons programme would lead to a disruption of Persian Gulf supplies.
Deborah White, an analyst at SGCIB in Paris, said: "The Iranian situation is making us all very nervous... We don't seem to be getting anywhere on the diplomatic solutions."
With almost a quarter of Nigerian oil production still shut after rebel attacks two months ago, oil consumers feel almost as vulnerable as they did during the Arab oil embargo in the 1970s.
"The Iranian situation is making us all very nervous... We don't seem to be getting anywhere on the diplomatic solutions"
Deborah White, oil analyst
Oil prices have soared from $20 at the start of 2002 and are now nearing the inflation-adjusted peaks of more than $80 hit in 1980, the year after the Iranian revolution.
Initially fuelled by strong demand from the US and the fast-growing economies of China and India, the rise has accelerated over the past year on worries over supplies.
Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo, said: "The market sentiment now is much more nervous."
The disruption to Nigeria's crude output will become more critical when Americans start to use their cars more during the holidays. Analysts say petrol stocks in the world's top oil user fell again last week.
"Nigerian crudes are rich in gasoline, unlike crudes from Saudi Arabia and the Middle East, which are sour, heavier and harder to process," Emori said.
"Things haven't changed so much, but as we approach the summer driving season we'll need more crude to make gasoline and we know also that US gasoline production has its limitations because of the tight refining capacity."