The strike at Grangemouth refinery in Scotland is sending shivers through the global oil markets with the price of crude closing in on $120 a barrel.

New York's main oil futures contract, light sweet crude for delivery in June, gained 88 cents to $119.40 after closing at $118.52 a barrel on Friday. New York crude reached an intraday record of $119.90 last week.

Brent crude for June delivery rose 96 cents to $117.30 against a close last week of $116.34.

The strike at Grangemouth has forced BP to close the Forties pipeline that carries 40% of Britain's oil and gas, sparking panic-buying by motorists at petrol stations.

The pipeline carries 700,000 barrels a day and BP says it could be back in operation within 24 hours but might take a few more days to get back to full flow.

It also warned that getting the pipeline back to capacity quickly would depend on power supply being resumed. Grangemouth, owned by chemical company Ineos, also supplies vital steam and power to BP's Kinneil plant that processes the crude oil coming ashore from 70 North Sea fields.

Grangemouth produces about 10% of the UK's petrol and diesel, but the disruption to supplies from North Sea fields could be the most expensive factor with the strike potentially costing £50 million a day in lost revenue.

Seven tankers carrying 65,000 tonnes of fuel are on their way from Sweden and the Netherlands to Scotland in a bid to maintain fuel supplies during the strike.

Oil markets are also worried about new violence in Nigeria where an armed group in the southern oil-producing region on Friday sabotaged a supply pipeline belonging to Anglo-Dutch energy giant Shell.

Unidentified gunmen yesterday killed five policemen and seized several weapons in a raid on a police station in the oilrich Nigerian state of Rivers.

There is also increased tension in the Gulf, with a cargo ship hired by the US military firing warning shots at suspected Iranian boats on Friday. It is the latest in a series of recent confrontations with Iranian and other vessels.