Oil prices have risen to the highest level since 2008 after the US said it was discussing a potential embargo on Russian supplies with its allies.
Brent crude – the global oil benchmark – spiked to above $139 a barrel, before easing back to below $130.
Energy markets have been rocked in recent days oversupply fears triggered by the Russian invasion of Ukraine.
Consumers are already feeling the impact of higher energy costs as fuel prices and household bills jump.
Stock markets in Asia fell on Monday, with Japan’s Nikkei and the Hang Seng in Hong Kong down by more than 3%.
On Sunday, the US Secretary of State Antony Blinken said the Biden administration and its allies are discussing an embargo of Russian oil supplies.
Later, US House of Representatives Speaker Nancy Pelosi said the chamber was “exploring” legislation to ban the import of Russian oil and that Congress this week intended to enact $10bn (£7.6bn) of aid for Ukraine in response to Russia’s military invasion.
“The House is currently exploring strong legislation that will further isolate Russia from the global economy,” Ms Pelosi said in a letter.