By Bruce Stanley
The Associated Press

LONDON - 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 $42.90, up $1.06 - still a record close. The previous high was $42.33 on June 1.

In London, Brent crude for September delivery reached $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 inventories.

Yukos pumps an estimated 1.7 million barrels a day and exports half 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.

On the Nymex, August gasoline futures closed up 5.11 cents at 1.2954; August heating oil rose 2.18 cents to settle at $1.1442 per gallon; and August natural gas climbed 5.9 cents to close at $6.048 per 1,000 cubic feet.