The price of Brent crude oil has hit $111 a barrel, and US crude also rose in price, as worries persist about the unrest in Libya.
Markets are concerned the trouble could worsen in key oil producing countries, affecting supplies and hitting growth.
The price of Brent rose more than $5 a barrel, to $111.25.
And US light sweet crude oil prices hit $100 a barrel for the first time since October 2008, before settling up 2.8% at $98.10 a barrel.
It comes as the White House said it was watching oil prices.
"We are obviously monitoring this very carefully and we are concerned about it," White House spokesman Jay Carney said.
Meanwhile, Total has became the latest European oil firm to act, saying it was "beginning to suspend" its production in Libya.
Spanish oil firm Repsol and Italy's ENI partly suspended operations in the North African country earlier this week.
Libya is the world's 12th-largest exporter of oil and the majority of its output goes to Europe.
Shares in Austrian oil and gas firm OMV fell by more than 5% after the company said it was expecting a temporary fall in Libyan production, and that the unrest in the country could lead to a complete shutdown.
Meanwhile, the AA said that while it had not noted any petrol price increases at UK pumps, motorists should "brace themselves for a short, sharp, shock".
And it said the current situation should put pressure on the government not to go ahead with fuel duty increases.
Saudi Arabia's Oil Minister Ali al-Naimi tried to reassure markets on Tuesday that his country's spare production capacity could help "compensate for any shortage in international supplies".
However, oil industry analyst Mehdi Varzi told the BBC World Service that he estimated that the unrest could be affecting "up to a third" of Libya's total crude oil exports.
Mr Varzi said it would be difficult to compensate for the loss of these supplies.
"They are of extremely high quality in terms of crude... and this kind of crude is very difficult to replace, even if the Saudis want to replace it."
The markets have been gripped by uncertainty this week as investors tried to work out the possible impact of the Libyan violence on oil supplies.
With foreign oil companies suspending production, experts pointed out that the state-owned National Oil Company has run Libya's oil fields before and could do so again.
It did so in the 1980s when US oil firms left the country - but production would be hampered without the input of experienced of oil companies.
Operations could also be further disrupted if sanctions were imposed on Col Gaddafi's regime.
French President Nicolas Sarkozy has called on European leaders to suspend economic ties with Libya.
"I ask the foreign minister to propose to our European partners the adoption of quick, concrete sanctions so that all those implicated in the violence know that they will have to assume the consequences," President Sarkozy said in a statement.
Analysts are predicting further oil price rises to come.
"Global investors are now trying to decide if the Middle East crisis means a major shift of geopolitical balance of power in the region," said Masayuki Kubota of Daiwa SB Investments.
He added that there could be "more instability and possible further oil price rises".
If Libyan supplies went completely offline then in the short term the price of crude could rise by another $10 or $20 a barrel, Mehdi Varzi said.
However, if unrest spread further throughout the region then the situation would become much more serious, and develop "a fully fledged international oil price crisis", he added.
On Tuesday, International Energy Agency chief economist Fatih Birol said oil prices were in the danger zone.
He said they could rise further if turmoil continued in the Middle East and that may slow the recovery from the global economic crisis.
"The global economy is more fragile now than it was in 2008," Mr Barratt said.
"Growth has been driven by stimulus packages and austerity measures. I don't see it being able to absorb a rise to $140 like it did two years ago."