Oil Hits Six-Month High Amid Syria Tensions
Oil prices have reached their highest level since February after markets reacted to the threat of military action in Syria.
Following their biggest one-day rally in six months on Tuesday, London Brent oil prices rose another 0.3% in early trading to reach $115 a barrel.
Meanwhile, the price of US crude soared to a two-year high of over $110 a barrel.
Global stock markets took the blow as investors shifted to safe-haven assets, such as gold and government bonds.
As a result gold prices increased, hitting a three-and-a-half month record of $1,433,850 an ounce.
Airlines were also hit, with shares dropping for British Airways owner International Airlines Group and budget carrier easyJet.
In London the FTSE 100 declined, while European markets were also down.
Ishaq Siddiqi, market strategist at ETX Capital, warned that tensions in the Middle East could trigger major disruption to oil supply.
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 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."
Although Syria is not a major oil producer, there are concerns that the conflict could spread, disrupting the flow of oil from the Middle East, including oil rich countries such as Iran and Iraq.