As violence spreads across Libya, fresh concerns have been raised about a fall in global oil supply European stock markets have fallen as unrest in Libya and the Middle East sent oil prices to a two-and-a-half year high.
At 0830 GMT the FTSE, Dax and Cac 40 were all trading about 1% lower.
Asian stock markets closed down over fears about the continuing political uncertainty in the region.
Analysts said they were worried about the high oil prices slowing global economic expansion and corporate profit growth.
Japan’s Nikkei index closed 1.7% down, South Korea’s Kospi also ended the day 1.7% lower and Hong Kong’s Hang Seng was 2.1% down.
Market sentiment was also hit by an earthquake in New Zealand.
New Zealand’s NZX 50 stock index fell 0.7% on concerns that the damage caused by the earthquake will further add to the country’s growing debt.
The New Zealand dollar also weakened by nearly 2% against the US dollar.
In Asia, the stock markets were concerned about the unrest in Libya and other Middle Eastern countries affecting oil supplies.
Brent crude rose as much as 2.7% to $108.1 per barrel, before dropping back to trade at $107.16. In New York, US light, sweet crude climbed as high as $94.49, before retreating to trade at $92.96.
“The market is very nervous over news of violence in Libya, and that’s driving prices,” said Yinxi Yu of Barclays Capital.
“It looks like the uncertainty in the region is not going to be resolved anytime soon.”
Companies that depend on fuel, such as airlines, were among the biggest decliners on Asia’s stock markets.
Fuel represents about 40% of operational costs for airlines, and investors were worried that the higher prices would eat into profits.
Singapore Airlines, the world’s second-biggest carrier by market value, declined 1.7%. Korea Airlines slumped 9%, and Cathay Pacific Airways was down 4.5%.
In Taiwan, China Airlines lost 6%, dropping to its lowest value since 30 July. Australia’s national carrier Qantas slipped 1.2%.
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