International oil prices have shot up to all-time highs as the launch of a major U.S.-led offensive in Iraq's holy city of Najaf has boosted fears of a retaliatory attack on the local oil industry.

At the New York Mercantile Exchange, light sweet crude for delivery in September soared to 45.75 dollars at one point Thursday before finishing the day at 45.50 dollars a barrel, a record settlement price in the 21 years the contracts have been traded.

In London, the benchmark Brent North Sea crude for September delivery surged to an all-time high of 42.56 dollars before settling at 42.29 dollars - another record-high finish.