At least three oil companies stop output in the third largest producer of Africa, pump 1.6 million barrels per day (BPD) or almost 2pc global supply resulted in violent clashes in Libya.
Disturbance mark the first reduction in the supply of oil resulting from a wave of protests that swept Middle East and North Africa oil producers.
Investors fear for the potential impact on the flow of oil from first exporter Saudi Arabia if she suffers from similar problems.
In addition, International Energy Agency (IEA) Executive Director Nobuo Tanaka said that the price of oil over $100 per barrel for the rest of the year could tip the economy back in a repeat of the economic crisis of 2008.
"We are very concerned about the situation, it is a risk for the stable supply of petroleum," he said yesterday at the International Energy Forum in Riyadh.
US crude rose high sheath $ per barrel, the highest level since October 2008. Business morning in London, the April contract had trimmed gains to trade at $95.93, up to 2 5pc on the end of last night.
Brent crude, which is trade even more elevated the U.S. price jumped $ 1.26 $107.04 per barrel. Monday, Brent hit a 2 and half year high of $108.70.
"Even if the Libya stops completely, there is not a question of supply." "But brut (U.S.) could go to $100, taking into account the potential of this contagion to spread to Saudi Arabia," said Jonathan Barratt, CEO of Sydney freight Brokerage Services.
To date, events in Saudi have been low key. But Shia majority in neighbouring Bahrain are to protest against the Government of Sunni and fears it could spill over to the minority Shi'ite living in oil producers is the Saudi province.
"The importance of the Bahrain is perhaps being currently weakened." While not a major producer of oil, impact of Bahrain on the oil market is reflected through its importance in Saudi Arabia, "said Barclays Capital Helima Croft and Amrita Sen analysts in a research note.
Supplies of natural gas also felt the impact of the Libya disorders as a pipeline carrying Libyan gas in Italy has been closed.
Brent crude has increased by almost 5pc 12 so far this year. U.S. crude is just below the year 5MC but it is more than $50 below its 2008 high of $147.27.
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