Israel declaring war with Hamas over the invasion on Saturday has deepened Middle Eastern tensions which has seen the price of oil soar.

Brent crude soared to more than 5% to $89 per barrel and then slightly edged back to $87.27.

Swissquote Bank’s markets expert said Saturday’s attack by Hamas “sent a panic wave into financial markets.”

Read more on Israel-Gaza war:

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Israeli fighter jets bomb more than 400 ‘Hamas terrorist targets in Gaza’ in an intense air strike

London’s blue chip share index rose after defence stocks and oil giants made gains and the FTSE 100 was up 2.15 points which stood at 7496.73 after opening.

BP and Shell were higher 2% and 1% respectively on Monday morning and defence giant BAE Systems was up by 5%.

Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said, “Fears of a potential retaliation against Iran threaten the passage of vessels carrying oil through the Strait of Hormuz and flip the market rhetoric from a potentially slowing global oil demand to tight global supply.”

There is a real risk that the US and Iran could be pulled into the turmoil, Ozkardeskaya warned that “escalation and prolongation of Mid-East tensions could be the final straw that could bring the world very close to the brink of recession.”