Growing expectation of a military strike against Syria have pushed Brent crude oil prices to a six-month high of more than $117 a barrel.
Prices hit $117.34 as the UK prepared to seek United Nations backing for military action on the crisis-hit Middle East country, with a lengthy outage at several Libyan oilfields also underpinned price rises.
The price of US crude also hit an 18-month high of just over $109 dollars a barrel.
Although Syria is not a major oil producer, there are concerns that conflict in the region will disrupt the flow of oil from the Middle East, with worries that violence could spread to other oil exporting countries, such as Iran and Iraq, and hit important shipping routes.
Similar fears over Egypt sparked a sharp rise in Brent prices earlier this month.
The rising cost of crude provided a boost to oil stocks on the London market, with Royal Dutch Shell up 2% and BP nearly 1% higher, while oil and gas exploration and production group Tullow Oil was another beneficiary, up 2%.
Ishaq Siddiqi, market strategist at ETX Capital, warned that tensions in the Middle East had the potential to trigger a major disruption to oil supply, which risked throwing the global economic recovery off course.
He said: “Once filtered through to the real global economy, the increase in oil prices will put a halt to the current pace of economic momentum we are currently experiencing in major parts of the world.
“It’s plausible that Brent oil prices could be over 120 dollars a barrel in the coming days – and, if oil prices spike even higher, it wouldn’t be out of the question for the Federal Reserve to hold off on tapering stimulus measures this year.”
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