Oil prices jump $2 after US leads air strikes on Libya
Brent crude rose as much as $2.26 to $116.19 a barrel, while US light crude rose as much as $2.12 to $103.19.
Libya is the world's twelfth-largest oil producer. There are concerns the conflict may affect crude supply.
Crude prices have been volatile in recent weeks as markets have dealt with a number of issues including the Japan earthquake.
Fear factor
Since the start of the unrest in Libya, Saudi Arabia and other OPEC nations have assured that they are willing to increase their output and replace any loss in Libyan supplies.
These assurances helped calm markets a bit, but the air strikes on Libya over the weekend have once again stoked fears.
Analysts say that uncertainty about the future is driving market sentiment.
"I can see uncertainty and fear driving the price of oil higher in the short term," said Matthew Lewis of CMC Markets.
Mr Lewis also added that as long as a permanent solution to the Libya unrest was not achieved, oil price will remain volatile.
"At this stage, it looks like Libya has further to play. Gaddafi still seems very defiant," he said.
"We'll see further spikes and shocks in the oil market this week", BBC News informs.
See www.bbc.co.uk for full version.