Oil prices have jumped as worsening relations between Saudi Arabia and Iran raised concerns about possible supply disruptions.
Brent crude prices rose more than 3% on Monday, before easing to $38.10 a barrel, still up about 2%.
The price of US crude was up more than 2% to $37.81 a barrel.
Share markets were also rattled by rising tensions after Saudi Arabia executed a Shia cleric, and the price of gold rose 1%.
“With increased geopolitical tensions between Saudi Arabia and Iran, the market has put a premium on prices just when markets opened (in 2016),” brokerage Phillip Futures said in a note.
Saudi Arabia has cut diplomatic ties with Iran. Protesters in Tehran ransacked the Saudi embassy following the execution of Sheikh Nimr al-Nimr.
Saudi Foreign Minister Adel al-Jubeir said Iranian diplomats had 48 hours to leave the country. Iran’s supreme leader warned Saudi Arabia it would face “quick consequences” for the execution.
Fearing further upheaval in the already volatile Middle East, the US has urged regional leaders to try to ease tensions.