NEW YORK (AP) — Oil prices rose above US$109 a barrel Friday and are approaching last year’s highs as tensions increase over Iran’s nuclear program. A weaker dollar was a contributing factor.

Western nations fear Iran is building a nuclear weapon and have been trying to force it to open its facilities to inspection. Iran has refused, turning away international inspectors this week for the second time this month. The United Nations said Friday that Iran has responded to the recent scrutiny by speeding up production of higher-grade enriched uranium, feeding concerns that it is developing a bomb.

As both sides dig in for a protracted standoff, investors are snapping up oil contracts in case fighting breaks out in the heart of the one of the world’s biggest oil-producing regions. “Everyone’s pricing in the potential for war now,” independent analyst Stephen Schork said. “Without a concrete resolution, nobody knows how high this can go.”

Israel hasn’t ruled out an attack on Iran, and Iran has said it is ready to strike pre-emptively, possibly targeting the Strait of Hormuz, if it is threatened. The Persian Gulf passageway is a potential choke point for oil supplies. One-fifth of the world’s oil tankers pass through it every day.

On Friday, benchmark West Texas Intermediate (WTI) crude rose by US$1.94 to end the week at US$109.77 per barrel on the New York Mercantile Exchange, after climbing as high as US$109.98 earlier in the session. Brent crude rose by US$1.85 to finish at US$125.47 per barrel in London.

WTI peaked near US$114 a barrel last May, while Brent rose above US$126 per barrel.

The price of gasoline, which is made from crude oil, has soared with oil prices. The US average jumped by nearly 12 cents per gallon in a week, with state averages above US$4 per gallon in California, Alaska and Hawaii.