Source: Sharecast
At 0830 GMT, the FTSE 100 was down 1.8% at 10,105.00.
Meanwhile, Brent crude was 17% higher at $108.20 a barrel as trading started on Asian markets - at one point hitting $119 - marking the first time prices have breached the $100 mark since Russia's invasion of Ukraine in February 2022.
West Texas Intermediate was up 18% at $107.70 a barrel.
Kathleen Brooks, research director at XTB, said: "There was an escalation in attacks by both Iran and US forces over the weekend and there were more strikes on key energy infrastructure across the Gulf region, and further shutdowns in oil and gas production facilities.
"Although there are some key economic data releases this week, including US CPI and the UK GDP, developments in energy price markets will determine risk sentiment in the coming days."
As far as the G7 meeting is concerned, Brooks said a large release of strategic oil reserves could keep the oil price stable at these levels at the start of the week.
"There are some who argue a large decline in US and global equities, along with signs that the market is preparing for Fed rate hikes on the back of the oil price spike will force President Trump to deescalate the situation, but the hawkish comments from the US Secretary of War, that the US is close to winning, makes this less likely, and ordinary people around the world will face the consequences of the fallout from this conflict," she said.
In equity markets, oil giants Shell and BP were the top performers on the FTSE 100. Ithaca Energy, Energean and Harbour Energy also gained ground.
Shipping services firm Clarksons rose despite posting a drop in full-year profit amid "extraordinary geopolitical and economic complexity".
On the downside, miners were under the cosh as copper prices fell, with Anglo American, Antofagasta and Glencore all weaker.
Engine marker Rolls-Royce retreated amid concerns it may be hit by a reduction in travel, along with Wizz Air, BA and Iberia owner IAG and easyJet.
Market Movers
FTSE 100 (UKX) 10,105.00 -1.75%
FTSE 250 (MCX) 21,967.33 -2.37%
techMARK (TASX) 5,748.30 -2.01%
FTSE 100 - Risers
Shell (SHEL) 3,183.00p 2.21%
BP (BP.) 507.00p 1.70%
Pearson (PSON) 976.00p 0.51%
Admiral Group (ADM) 3,090.00p 0.13%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 98.64p 0.00%
Beazley (BEZ) 1,288.00p -0.08%
Schroders (SDR) 585.00p -0.09%
Tesco (TSCO) 465.70p -0.15%
3i Group (III) 2,960.00p -0.17%
HSBC Holdings (HSBA) 1,230.20p -0.32%
FTSE 100 - Fallers
SEGRO (SGRO) 716.40p -5.30%
Anglo American (AAL) 3,027.00p -5.23%
Rolls-Royce Holdings (RR.) 1,191.50p -4.82%
Airtel Africa (AAF) 327.20p -4.73%
Spirax Group (SPX) 6,815.00p -4.58%
Antofagasta (ANTO) 3,530.00p -4.57%
IMI (IMI) 2,672.00p -4.48%
British Land Company (BLND) 365.80p -4.31%
Burberry Group (BRBY) 1,051.00p -4.28%
Standard Life (SDLF) 683.50p -3.94%
FTSE 250 - Risers
Ithaca Energy (ITH) 257.00p 3.53%
Harbour Energy (HBR) 296.60p 3.47%
Diversified Energy Company (DI) (DEC) 1,100.00p 2.04%
GCP Infrastructure Investments Ltd (GCP) 75.00p 1.73%
Clarkson (CKN) 4,435.00p 1.70%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 310.00p 1.64%
Syncona Limited NPV (SYNC) 97.00p 1.46%
ITV (ITV) 84.05p 1.38%
JPMorgan Emerging Markets Dividend Income (JEMI) 188.00p 1.35%
Mitchells & Butlers (MAB) 296.00p 1.20%
FTSE 250 - Fallers
Wizz Air Holdings (WIZZ) 871.50p -6.92%
Ceres Power Holdings (CWR) 304.00p -6.46%
Vietnam Enterprise Investments (DI) (VEIL) 722.00p -5.87%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 438.00p -5.60%
Hochschild Mining (HOC) 644.00p -5.01%
Schroder Oriental Income Fund Ltd. (SOI) 356.00p -4.69%
International Workplace Group (IWG) 201.20p -4.51%
Travis Perkins (TPK) 588.50p -4.44%
Shaftesbury Capital (SHC) 135.60p -4.25%
Genuit Group (GEN) 306.50p -4.22%