The oil price rose to $108.33 (£80.79) a barrel by 7am Eastern time, according to the Brent benchmark, up $3.59 from the previous morning.
Brent crude is now around 42 dollars higher than it was a year ago. It has gained 3.42% since yesterday and 9.25% over the past month, compared with a price of $66.47 a barrel a year earlier.
Why the oil price can change sharply
Oil prices are driven primarily by the balance between supply and demand, as well as expectations about future production and consumption. Geopolitical developments, decisions by OPEC+, war and concerns about recession can all cause sudden movements.
The market trades continuously while futures exchanges are open. These contracts involve agreements to buy or sell oil at a later date, meaning prices can shift whenever traders respond to new information.
Brent is the main global oil benchmark and is generally seen as the clearest measure of worldwide crude prices. West Texas Intermediate is the principal benchmark for North America.
Oil has experienced dramatic rises and falls over previous decades. Prices climbed during the oil shock of the early 1970s, fell in the mid-1980s amid weaker demand and increased production from non-OPEC countries, and rose again in 2008 before dropping during the global financial crisis.
Demand collapsed during the 2020 Covid lockdowns, sending oil prices below $20 a barrel. The market has also been shaped by supply restrictions, oversupply, energy policy and wider economic conditions.
How higher oil prices affect consumers
Crude oil is one of several costs included in the price paid at petrol stations. Refining, wholesale charges, taxes and service-station mark-ups also contribute to the final amount.
However, crude oil typically makes up more than half the price of a gallon of petrol, so a sharp increase tends to feed through quickly to motorists. Falls in crude prices can take longer to reach consumers, a pattern sometimes described as prices rising like rockets but falling like feathers.
Higher oil prices can also increase the cost of transporting goods, adding to prices elsewhere in the economy. Oil and natural gas are closely linked as major sources of energy, and industries may turn to gas for some operations when oil becomes more expensive, potentially increasing demand for natural gas.
The United States can draw on its Strategic Petroleum Reserve during emergencies, including sanctions, severe storm damage or war. The reserve is intended as an immediate safeguard to support essential services and parts of the economy, rather than a long-term answer to supply pressures.
