Oil companies were the only shares in green on Monday as oil prices were catapulted higher by the ongoing war in the Middle East.
Brent crude oil surged at the start of the new week, jumping to $107 per barrel, having risen from $84 to $92 last week. The price hit a high of $119 during Asia Pacific trading before softening a little.
This followed oil and gas producers in the Middle East starting to shut down some production amid the effective closure of the Strait of Hormuz.
At one stage, US WTI crude prices jumped nearly 30%, its largest ever daily price gain, to over $114 a barrel, before settling nearer $103 as trading began in Europe.
On the FTSE 100, shares in Shell PLC (LSE:SHEL, NYSE:SHEL) rose 1.9% to 3,192p, and BP PLC (LSE:BP.) was up 1.2% to 504.9p.
Mid-caps Ithaca Energy PLC (LSE:ITH) and Harbour Energy PLC (LSE:HBR) were climbing faster, up 3.6% and 2.7%, while Energean PLC (LSE:ENOG) shares increased 1.2%.
"The pace of the price increase and the level of prices are reminiscent of the developments in 2022, when Russia attacked Ukraine," said analysts at Danske Bank.
Economists at Rabobank said the situation in the Middle East was "starting to look like a potential combination of the 1973 post-Yom Kippur War oil shock, the 2022 Russia-Ukraine War commodity shock, and the 2020-21 Covid supply chain shock.
"The longer this goes on, the more exponential the damage becomes in a domino effect," they said.
The oil price remains comfortably abover $100, which has significant ramifications for the global economy and financial markets.