Oil begins 2012 with a bang January 3, 2012, 9:18 a.m. NEW YORK - Oil prices are soaring Tuesday as tensions grow over key Persian Gulf oil shipments. In midday trading benchmark crude jumped $3.55, or 3.6%, to $102.38 per barrel in New York. Brent crude, which is used to price foreign oil varieties that are imported by U.S. refineries, rose $3.26, or 3%, to $110.64 per barrel in London. Prices shot up as exchanges opened for the first day of 2012 trading. Commodity prices tend to rise at the beginning of January as investors start the new year with a fresh round of trading. This year prices were driven by heightened concerns that Iran might try to close the Strait of Hormuz in the Persian Gulf to oil tankers, if Western nations impose new sanctions. Iran warned the U.S. to stay out of the strategic waterway, where one-sixth of the world's oil shipments pass every day. On Monday its navy fired a cruise missile as part of a military exercise. The U.S. and European nations are mulling further economic sanctions against Iran because of its nuclear program. A standoff could result that would be damaging to the global economy. A dustup with Iran could slow crucial oil supplies at a time when the world needs every drop. Global oil demand is expected to rise to a record 89.5 million barrels per day in 2012. Three of the world's largest economies - the U.S., China and India - continued to grow with increased manufacturing activity in December. A private trade group said that U.S. manufacturing expanded last month at the fastest pace in six months. The Commerce Department also said that U.S. construction spending jumped in November on a spate of new projects for single-family homes and apartments.