Traders are bidding up crude by as much as 15 per cent on the assumption that conflict with Iran will lead to the biggest disruption to Gulf oil supplies since 1991. Analysts from Bank of America to IHS Jane's say those concerns are exaggerated. Brent, the benchmark grade for more than half the world's oil, is trading for $5 (Dh18.3) to $15 a barrel more than it would without the standoff with Iran, according to Societe Generale, which says prices may jump to $200 should cargoes be interrupted. UBS AG, Switzerland's biggest bank, says the risk of a confrontation that would shut off shipments through the Arabian Gulf has added about $10 to the price of crude. "Oil's recent rally is overextended," said Olivier Jakob, managing director at Petromatrix GmbH, a Zug, Switzerland-based consultant that counts Total and Gunvor Group Ltd among its clients. "The premium is at least $15, amid talk of Iran being proactive with an oil embargo" and a possible Israeli attack, Jakob, who recommends buying options that give traders the right to sell Brent, said in a February 9 interview. Brent has gained 12 per cent since December 14, the day after Iran, Opec's second-biggest producer, said that it was planning military manoeuvres in the Strait of Hormuz. The European Union last month announced a ban on Iran's oil imports by July 1 even after the nation's Vice President Mohammad Reza Rahimi threatened to close the strait should the 27-nation bloc go ahead with the embargo. Standoff Contracts for March deliveries of Brent expired at $118.16 a barrel on the ICE Futures Europe exchange in London on Tuesday. April supplies rose yesterday as much as 95 cents to $118.30. Prices are $11 higher than they would be without the tension over Iran, according to analysts and traders surveyed by Bloomberg. Estimates ranged from $5 to $15. The standoff with Iran centres on the nation's nuclear programme. In a November report, the International Atomic Energy Agency cited "credible" sources as saying the country has studied how to make a nuclear bomb. While Iran says the programme is for peaceful purposes only, the IAEA says the country's facilities are dispersed over a wide area and some are underground. IAEA inspectors visited Iran for talks last month and are scheduled to return on February 20-21. "Iran may lash out from time to time if it feels pressured, but there won't be an oil spike this year," said Cliff Kupchan, an analyst at Eurasia Group in New York. "Iran isn't moving all its nuclear activity underground and its progress on the larger centrifuges isn't very good. Those are the two ‘red-light' issues that can lead to an Israeli strike."