Oil prices broke above the $46 (€37.78) level yesterday after Russian oil giant Yukos said it would cut some oil shipments to China - the first toll on exports to emerge from the company's financial turmoil.

Continued disruptions to US supplies in the wake of Hurricane Ivan, which thrashed through the energy-rich Gulf of Mexico last week forcing oil platform shutdowns and evacuations, were also supporting prices.

US light crude settled up 76 cents at $46.35 a barrel, barely $3 below record peaks struck in August.

London's Brent crude was up 46 cents at $42.91 a barrel.

Russia's biggest oil exporter, Yukos, said yesterday it would cut its supplies to China by one million tonnes (7.33 million barrels) in the remaining months of 2004, as it lacks funds to pay export fees.

Yukos has repeatedly said it might be forced to cut production and exports after bailiffs froze its bank accounts as part of efforts to get more than $7 billion in back taxes from the company.

Analysts said the China curbs aimed to embarrass the Russian government less than a week before China's Prime Minister, Mr Wen Jiabao, is due in Moscow to prepare a visit by President Vladimir Putin to Beijing next month.

Countering fears of widespread disruption, Russia's state railways said that Yukos has prepaid rail shipments until the end of September and pipeline monopoly Transneft said it believed Yukos would pay export fees for October.

A Yukos spokesman denied a report that it would also suspend supplies to its Mazeikiu refinery in Lithuania.

Global supplies are already straining to meet the fastest growth in oil demand in 24 years, magnifying the impact of any disruption to oil flows.