Oil has hit a new record of more than 139 dollars a barrel.
High US jobless figures had already left the New York stock market reeling.
The latest surge in oil prices, jumping over 10 dollars in one day, comes amid rising tensions in the Middle East.
Kevin Saville of Platts Global Alert said:
“You had a geopolitical development this morning. You had the Israeli transport minister saying that he thought an attack on Iran’s nuclear sites was ‘unavoidable’,in his words. So that really set the market ablaze.”
Oil has risen 44 percent this year, threatening economic growth in major consumer countries and the trend looks set to continue. Analysts say prices could top 150 dollars a barrel by July.