Brent briefly spiked almost 14 percent and West Texas Intermediate nearly 12 percent at the start of business after the attack on the Islamic Republic, which killed supreme leader Ayatollah Ali Khamenei and other senior officials.

The bombings have also seen the vital Strait of Hormuz, through which around 20 percent of global seaborne oil passes, effectively shut and several ships attacked, fanning supply fears.

Equity markets across Asia sank, with Tokyo, Hong Kong, Singapore, Wellington and Taipei all deep in the red. US futures were down more than one percent.

However, energy firms rallied, with Australia's Woodside Energy jumping more than five percent and Santos climbing nine percent, while PetroChina added almost four percent in Hong Kong. Inpex in Japan was up more than 10 percent.

Gold, a key go-to safe haven in times of turmoil, climbed two percent.

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While the strikes have ramped up geopolitical worries, traders wound down their initial bets, with crude sitting around five percent higher and stock markets paring losses.

Brent, the international benchmark for crude, had already rallied last week on growing concerns Trump would order an attack as talks aimed at curtailing Iran's nuclear program stuttered.

"If higher oil prices persist, it raises the risk of stickier headline inflation and can slow the pace at which inflation prints improve," wrote Saxo Markets' Charu Chanana.

"That does not automatically mean policy tightening, but it can make the Fed more cautious about cutting quickly, because energy-driven inflation can spill into expectations and broader pricing behavior over time."

The US president has called on Iranians to rise up against their government and said the war could last "four weeks".

Iran's retaliatory missile and drone campaign in the Gulf killed four people and wounded dozens more, the UAE foreign ministry said.

While Iran has not officially closed the Strait of Hormuz, its Revolutionary Guards have warned against transiting the waterway.

Trump's 'Achilles heel'

On Sunday, at least two ships were struck, one off Oman's coast and another off the UAE's, British maritime security agency UKMTO said.

Iranian state television said an oil tanker was struck and was sinking after trying to "illegally" pass through the strait.

In such a situation, insurance costs become prohibitive, said Amena Bakr, head of Middle East and OPEC+ research at analysts Kpler, predicting that the price could hit US$90.

The main shipping companies have already confirmed that they are suspending the passage of their fleets along the route.

"While some alternate infrastructure could be used to bypass the Strait of Hormuz, the net impact from its closure would be a loss of eight to 10 million bpd (barrels per day) of crude oil supply," said Jorge Leon, an analyst with Rystad Energy, in a note on Saturday.

In theory, oil-importing countries have reserves, with OECD members required to maintain 90 days' worth of stocks, but prices above $100 cannot be ruled out.

If the blockade of the Strait of Hormuz continues, "no matter how much spare capacity (in the strategic reserves) is not going to fill that gap. That gap is just too big", said Bakr.

Another analyst at Kpler, Michelle Brouhard, described high oil prices as "the Achilles heel of Trump".

In her view, Iran is likely to look to keep crude prices high to force Trump to back down, as he promised his electorate low prices, at a time when the United States is already gearing up for mid-term elections at the end of this year.

Gas prices also soared Monday, dealing another blow to the world economy, as Qatar is a key exporter of liquefied natural gas, heightening inflationary risks.

The last time crude prices climbed above $100 was at the start of the war in Ukraine. Gas also soared, which played a major role in a prolonged period of rising prices.

Rising energy prices, increased shipping costs and loss of revenue for air transport could have "a harmful effect on growth", said economist Eric Dor, from the IESEG School of Management in Paris.

"If it's a matter of three days, it's not serious. But if it's over a longer period, then it will have an additional recessionary effect," he told AFP.

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