Oil prices have climbed to their highest level since 2014 after a drone attack on production facilities in the United Arab Emirates raised fears of supply chain disruption.
Brent futures traded in London topped $88 per barrel as the threat of new geopolitical tensions added to a strong rally driven by booming demand around the world.
Traders are already being hammered by disruption to global shipping channels, while a range of outages including in Libya have further hit production.
Meanwhile, the omicron variant of Covid has had a more limited impact on demand than expected as many countries avoided lockdown.
$100 oil this year?
Analysts at Opec, the cartel of oil producers, have said they expect the effect of the variant to be "mild and short-lived".
Goldman Sachs analysts have raised their forecast for oil and now expect it to now break through $100 a barrel by the third quarter.
And there are already concerns that increases in the cost of oil could further contribute to a cost-of-living squeeze.
"Traders are eyeing the $100 per barrel mark for crude oil for the first time since 2014, with the perceived diminishing threat posed by Omicron to the global economy and supply constraints and disruption driving the black stuff higher," AJ Bell's investment director Russ Mould told the BBC.
"A rise in oil prices to a seven-year high and a continuing, though below inflation, rise in UK earnings has put the spotlight once again on inflationary pressures and a cost of living crisis," he added.