Tensions in the Middle East and signs of an improving US economy have driven oil prices to post-recession highs in recent weeks.
Brent crude, which is used as a benchmark for petrol prices in Europe, has been as high 128 US dollars per barrel - its highest level since before the world's plunge into recession brought the price crashing down in 2008.
Oil prices have surged from 96 US dollars a month ago because of fears that escalating tensions over Iran's nuclear programme could trigger a disruption in global crude supplies.
The US and Europe are imposing sanctions on Iran while the Middle Eastern country has threatened to cut supplies to some countries and halt oil tankers passing through the Persian Gulf's Strait of Hormuz.
There was a brief spike in the price of Brent crude last night until Saudi Arabia denied Iranian media reports of a pipeline explosion.
Improving economic prospects have also fuelled prices, although Ross Strachan, commodities analyst at Capital Economics, expects oil prices will drop sharply to 85 US dollars a barrel by the end of 2012 as the eurozone area slips into recession, helping to weaken demand.
He also expects the impact from Iran's actions to be less severe than many people expect.
Oil prices fell by two-thirds in the wake of the last recession but since then they have marched higher as the global economic recovery saw soaring demand from booming emerging markets such as China.
The so-called Arab spring pushed Brent above 120 US dollars a barrel last year, fuelled by fears that Libyan supplies would dry up amid the civil war and that other key oil producing countries would suffer similar turmoil.
Prices moderated in the second half of 2011 but rarely fell below 100 US dollars per barrel, as Libyan supplies recovered.
With oil used to make and transport so many products, it has been a key driver of the rising inflation that has hurt consumers in recent years.
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