LONDON (AP) – Crude oil shot to new highs Wednesday, hitting $43 a barrel in New York, as markets reacted to a threat by Russian authorities to shut down most of the production from that country’s largest oil company.

Yukos, which produces 2 percent of the world’s oil, has been battered by a gigantic overdue back taxes bill. The company said it does not have the cash to pay its tax debt. And, with its assets frozen by court order, Yukos roiled markets Wednesday by saying it might have to halt its main production units within a few days.

In Wednesday trading, September contracts of U.S. light crude spiked 3 percent to $43.05 a barrel on the New York Mercantile Exchange – the highest level since the exchange began offering the light, sweet crude contract in 1983. Prices eased a bit to settle at US$42.90, up US$1.06 – still a record close. The previous high was $42.33 on June 1.

In London, Brent crude for September delivery reached US$39.68 a barrel on the International Petroleum Exchange, beating the previous high of $39.65 on Oct. 12, 1990, when Iraqi troops invaded Kuwait. Prices there eased as well, and settled up 99 cents at $39.53.

“The Yukos thing could dramatically affect global oil supplies,” said Adam Sieminski, an oil price strategist at Deutsche Bank in London.

Crude supplies are already extremely tight, with Iraq’s output hampered by saboteurs and most producers already pumping as much as they can. Saudi Arabia, the only producer that still has significant spare capacity, has recently boosted its production by about 1 million barrels a day, but much of this fresh oil has yet to reach customers and replenish their depleted inventories.

Yukos pumps an estimated 1.7 million barrels a day and exports about half of its output.

“The Saudis just spent the last three months putting an additional 1 million barrels on the market, and the action in Russia threatens to take 1 million off,” Sieminski said. “Do we think this is really going to happen in Russia? No. But does anybody know for sure?”

Russian media reports cited a letter sent by Yukos lawyers to Justice Minister Yuri Chaika regarding a bailiffs’ order telling three Yukos production subsidiaries to cease all sales of company property. Yukos officials repeatedly have warned that the company is being driven toward bankruptcy.

Yukos spokesman Alexander Shadrin said the letter asked the Justice Ministry and bailiffs to explain the order. If they confirm that Yukos can no longer put its crude into pipelines for shipment, “then in two to three days we will have to stop oil extraction,” Shadrin told Associated Press Television News.

If Yukos can no longer export, there is “some prospect” that the United States and other major oil-consuming countries might decide to tap their emergency stockpiles of crude to try to dampen prices, argued Michael Rothman, chief energy strategist at Merrill Lynch in New York. These stockpiles contain about 1.4 billion barrels, half of them in the U.S. Strategic Petroleum Reserve.

Rothman said he foresees U.S. crude reaching as much as $43.50 a barrel within the next 30 days, but added that such prices aren’t sustainable “given the obvious political discomfort among both exporters and consumers.”

Other analysts weren’t so sure.

“Yukos is just a psychological event,” said Peter Gignoux, a London-based oil adviser for GDP Associates in New York. “There’s a doomsday machine out there that could easily drive prices higher.”

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