Oil prices are climbing on fears that the Ukraine-Russia crisis will disrupt supplies across the world.
The price of Brent crude, an international benchmark, reached a seven-year high of $97.76 (£72) a barrel on Tuesday.
Russia ordered troops into two rebel-held regions in Ukraine’s east after it recognised them as independent states.
In London, the FTSE 100 share index opened more than 1.4% lower before regaining some ground.
Asian stock markets closed lower, and US stock exchanges were braced for losses.
The UK and several western allies have threatened sanctions on Russia, which is the second largest oil exporter after Saudi Arabia. Russia is also the world’s top producer of natural gas.
Russia has said its troops will engage in “peacekeeping” in the self-declared Donetsk and Luhansk people’s republics.
But the US has said calling them peacekeepers is “nonsense”, and that Russia is creating a pretext for war.
The Ukraine-Russia crisis could have “substantial implications” on oil prices, said Sue Trinh of Manulife Investment Management.
Sanctions forcing Russia to supply less crude or natural gas would have “important impact on the global economy,” she added.
Maike Currie, an investment director at Fidelity International, said oil could go above $100 per barrel due to a combination of the Ukraine crisis, a cold winter in the US, and a lack of investment in oil and gas supplies around the world.
“Russia accounts for one in every 10 barrels of oil consumed globally, so it is a major player when it comes to the price of oil, and of course, it’s really going to hurt consumers at the petrol pumps,” she said.
There have been US and EU sanctions on Russia for a number of years, which has had a “massive impact” on the Russian economy.
Sanctions are likely to be “deepened”, Ms Currie said, including sanctions on financial institutions, technology such as chips, and individuals.