NEW YORK — Oil prices settled yesterday at their highest level so far this year on tensions between Iran and the West following Tehran's detention of British naval personnel. Gasoline futures prices climbed above $2 a gallon to their highest level since last September as a new driving season nears.

Vienna, Austria's PVM Oil Associates cited the "deteriorating relationship between Iran and the West and last week's further falls in U.S. commercial oil inventories" as driving crude prices upward. Iran is the Organization of Petroleum Exporting Countries' second largest producer.

British Prime Minister Tony Blair on Sunday called the Iranian seizure of the 15 sailors and marines "unjustified and wrong," saying that London saw their situation as "very serious." Iran suggested that the group may be tried for illegally entering Iranian waters.

Oil traders worried that an escalation in the conflict could cut Persian Gulf oil exports.

On the New York Mercantile Exchange, light, sweet crude for May delivery rose 63 cents to settle at $62.91 a barrel, the highest settlement for the front-month contract since Dec. 20. Earlier, the contract rose as high as $63.30 a barrel.

The Brent crude contract for May delivery gained $1.23 to settle at $64.41 a barrel on the ICE Futures exchange in London.

"The situation in Iran is keeping the market on guard, but the market is also keeping it in perspective," said Phil Flynn, an energy analyst at Alaron Trading Corp. in Chicago. "There's not a lot of panic buying, just a lot of solid buying."

Western tensions with Iran also increased after the United Nations voted Saturday to impose new and tougher sanctions against Iran for its refusal to stop enriching uranium — a move intended to show Tehran that defiance will leave it increasingly isolated.

Iranian President Mahmoud Ahmadinejad vowed that the latest sanctions would not halt the country's uranium enrichment "even for a second."

While the oil market may seem to have factored in the violence in Iraq and issues surrounding it, the latest events in Iran have kept oil prices elevated, said Andrew Harrington, an analyst with ANZ Global Natural Resources in Sydney, Australia.

"Now we're looking at a situation where some of that political risk premium is coming back into oil prices," he said.

Tension between Iran and the U.K. "adds another element which the energy market will have to take into account. It complicates issues. It is one of those unusual type of situations that then causes people to reassess where they stand," Harrington said.

The West suspects Iran's nuclear activities are aimed at producing weapons, though Tehran says they are exclusively for the production of energy.

Meanwhile, gasoline futures gained nearly 7 cents to settle at $2.0677 a gallon — prices not seen since last September — as traders anticipate the start of the driving season. However, some analysts believe that the market enthusiasm may be premature.

"I think we're seeing the grand finale of the preseason rally. Traders are chasing it higher, but cooler heads will prevail," said Tom Kloza of Oil Price Information Service. Kloza doesn't expect the same kind of rally the market saw last year, when gasoline prices rose at least a penny a day from the start of spring to May.

In Hawai'i, the average price for a gallon of regular yesterday was $2.975, up from $2.870 a month ago, according to the AAA Daily Fuel Gauge Report.