Geopolitical tension in Africa, Asia and the Middle East are contributing to high oil prices.

In Nigeria, rebels attacked an oil-transfer facility and caused a slowdown in the supply production. Investors, fearing a disruption in supply, and Royal Dutch Shell (NYSE:RDS-A)'s reduction in output kept oil prices around $116 a barrel Monday, the International Business Times reported.

Attacks by Turkish warplanes in oil-rich Northern Iraq added to the pressures, causing crude contracts to gain about $3.80.

Supply and demand forces continue to rule the markets as oil steadies. Last week, for the first time in weeks, a record price was not hit, but prices have settled above $116 per barrel.

Some analysts say prices will stay where they are until the United States ends its interest rate cuts and the U.S. dollar rebounds. Crude prices could begin to decline if that happens, and that would ease inflation as well, analysts said.

Oil prices touched $120 on Monday.

Shell, Repsol may pull away from Iran deals

Royal Dutch Shell and Spain's Repsol may pull away from oil deals with Iran, in a move Iran's Fars News Agency called caving in to U.S. pressure.

Russia's Gazprom, Indian Oil Corp. and Chinese firms, eager to get in on the South Pars natural gas field operations, could be next in line if the European groups leave the ongoing talks.

Shell and Repsol have until the end of the month to give Iran a final decision about the $10 billion project, but the prospect of facing sanctions from the United States, which has already imposed sanctions on Iran, has the firms hesitating.

As a result Shell and Repsol may sell their 50 percent interest in bloc 14, but they want to keep their interest in blocs 23 and 24, hoping to develop them when Iranian-U.S. tensions have eased. The rest of the shares are held by Iran's state oil company NIOC.

South Pars is one the biggest gas fields in the world, which extends under Iran and Qatar, and it may contain about 48 percent of the country's reserves, according to Iran's Pars Special Economic Energy Zone.

Shell is conducting technical studies for developing phase 13 of the field while French oil giant Total is considering development of Iran's first liquefied natural gas project.

Oil demand growth spurs safety need

As demand for oil grows, upgraded safety and inspection is becoming a priority.

Asset integrity management is reportedly becoming a top priority in the energy industry, in an attempt to extend the life of existing facilities and plants to meet continuing global and regional demand for oil and gas, said Paul Osborne, Middle East president of ESR Technology, one of the world's leading engineering, safety and risk consultancies.

"There is a significant trend towards what is called asset integrity management within regional oil and gas and petrochemical companies. A key element is to link risk assessment to asset integrity driven by the need to eliminate major plant failures," Osborne said.

In the Arabian Gulf countries there are more than 1,000 projects currently under way aimed at extending the life of existing oil and gas plants. The combined total of the projects currently under way is estimated at $950 billion, according to ESR Technology.

ESR Technology recently announced major expansion in the Middle East, based on major growth in the oil, gas and petrochemical sectors as the region brings forward major projects and programs to extend the life of existing plants.

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Closing oil prices, May 5, 3 p.m. London

Brent crude oil: $116.27

West Texas Intermediate crude oil: $118.17

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(e-mail: energy@upi.com)