Benchmark oil contract Brent North Sea surged above $80 a barrel on Thursday, hitting the highest level since late 2014 and extending a recent run higher fuelled by tight supply concerns.
Shortly before 1000 GMT, Brent North Sea crude for delivery in July jumped to $80.18 a barrel -- the highest level since November 2014 -- after a gain of more than 1% compared with Wednesday's close.
Around 1100 GMT, it pulled back to $79.90, still 62 cents higher from Wednesday.
New York's WTI contract was up 49 cents at $71.98 per barrel.
Global stock markets mostly rose and the dollar gained against major rivals.
Global oil supplies could be hit by President Donald Trump's decision to pull the United States out of the Iran nuclear deal, and also by falling production in crisis-hit Venezuela, the International Energy Agency said on Wednesday.
Iran has meanwhile said that Chinese state-owned oil company CNPC will replace Total on a major gas field project in the country should the French energy giant pull out over renewed US sanctions against Tehran.
Prior to Thursday's oil-price rally, crude futures had already been rising strongly thanks to steady demand growth and a landmark deal by oil producing countries, both inside and outside the Opec cartel, to lower output.
Oil's rise could meanwhile further push up inflation, impacting growth by quickening the pace of expected rises for interest rates.
"Clearly the recent rise in oil prices is going to pose a problem for some central banks due to the temporary impact it will have on the inflation data, especially when you consider that in the past year, Brent crude prices are up more than 50%," Craig Erlam, senior market analyst at Oanda trading group, told AFP.
"The biggest test may come in countries that are already seeing target or above target inflation like the UK."
With markets expecting inflation to pick up pace, including for other reasons such as improved wages growth, 10-year US bond yields have hit seven-year highs, adding to expectations for a series of US rate hikes this year.