Oil extended gains to above $99 a barrel on Monday, bolstered by Iran's warning that more U.N. sanctions would be "costly" to Western powers, and after Turkey's incursion into northern Iraq.

U.S. light crude for April delivery rose 57 cents to $99.38 a barrel by 0226 EST, adding to Friday's 58 cents gain.

London Brent crude rose 66 cents to $97.67 a barrel.

"Prices are influenced by fresh geopolitical concerns as Turkish troops crossed into northern Iraq in an offensive against Kurd militants," David Moore, a resource analyst at the Commonwealth Bank of Australia, said in a note to clients.

"There is also a possibility that tensions surrounding Iran's nuclear program may intensify."

Iran warned Western countries on Sunday that they would be the ones to suffer if they passed a new U.N. sanctions resolution on the Islamic Republic, raising the specter that the world's fourth-largest oil exporter would cut crude exports.

"Some Western powers are... choosing a wrong path and passing resolutions against Iran will be costly for them," Javad Vaeedi, deputy chief nuclear negotiator, was quoted by Iran's official news agency IRNA as saying. Vaeedi did not elaborate.

The International Atomic Energy Agency said in a report on Friday that Iran had shown new openness about nuclear advances, but not enough to prove the program was not geared to bomb making.

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