By Ga-Woon Philip Vahn Of DOW JONES NEWSWIRES SINGAPORE (Dow Jones)--U.S. crude-oil futures rose sharply Tuesday in Asia as concerns persisted over Middle Eastern supply constraints, with Iran threatening to further cut oil exports. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $104.91 a barrel at 0644 GMT, up $1.67 in the Globex electronic session. The April Nymex contract generated higher trading interest though, as the March contract expires at the end of the New York session later in the day. April futures rose $1.73 to $105.33 a barrel, while April Brent crude on London's ICE Futures exchange fell $0.09 to $119.96 a barrel. Market participants in Asia said many refiners and manufacturers in the region are increasingly worried about Middle Eastern supply shortfalls as Iran baffles the West by refusing to give up nuclear ambitions, despite numerous sanctions imposed by Europe and the U.S. "The West may keep tightening the sanctions knot around Iran but that will only put pressure on oil supplies because Tehran seems quite determined to win its nuclear tussle with West," a trader at SK Energy in Singapore said. Iran deployed warplanes and missiles Monday in an "exercise" to protect nuclear sites threatened by possible Israeli attacks and warned that it could cut oil exports to more EU nations unless sanctions are lifted. "Some industry players are even preparing for the worst-case scenario, expecting some sort of military confrontation between the two sides, which could lead to a significant rise in oil prices," the SK Energy trader said. However, the possibility of violent clashes between Tehran and the West is unlikely at this stage, The Schork Group said. The energy consulting firm noted that 22% of Iran's exports go to China and 14% to Japan, and until these major Asian buyers are seriously affected, "Iran will remain mostly bark and little bite." The Yomiuri Shimbun reported Tuesday that Japan will likely be exempted from U.S. sanctions on Iran. Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--rose 316 points to $3.0472 a gallon, while March heating oil traded at $3.2081, 192 points higher. ICE gasoil for March changed hands at $1008.50 a metric ton, down $3.75 from Monday's settlement. -By Ga-Woon Philip Vahn, Dow Jones Newswires; +65-64154149; philip.vahn@dowjones.com

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