A barrel of Brent from the North Sea jumped 4.7% to $86.65, while one of American West Texas Intermediate (WTI) was up 4.5% to $88.39 as Asian markets opened.
The surprise offensive by the Palestinian militant group against Israel has raised concerns about oil supplies from the Middle East.
“What is key for markets is whether the conflict remains contained or spreads to other regions, particularly Saudi Arabia,” said analysts Brian Martin and Daniel Hynes.
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“At least initially, markets seem to think that the situation will remain limited in scope, duration and impact on oil prices. But greater volatility can be expected.”
This crisis comes at a time when oil prices are already high due to worries about falling production from Russia and Saudi Arabia.
Fears also surround its impact on prices. Rising energy costs are one of the main drivers of inflation, as winter looms.
Some 1,000 people have been killed in Israel and Gaza following a large-scale assault by the militant group Hamas that started early Saturday. The death toll is expected to rise with many people critically wounded.
