The market was given a further jolt as Libya halted loading at key oil terminal after the closure of a major pipeline.
The news provided solid support for the oil market but gains were capped by stubborn demand jitters linked to the weak global economic outlook.
"Oil prices have surged on Monday once again propelled by developments in the Middle East -- with news of Iran's seizure of a British vessel and Libya shutting down its largest oil field," remarked Mihir Kapadia, head of Sun Global Investments.
"Geopolitical concerns have pushed the markets higher after weeks of worries regarding slowing global growth."
In late morning deals, London Brent oil leapt 2.1 percent and New York crude rallied 1.6 percent.
Libya's National Oil Company said it had stopped loading crude at a key government-controlled shipping terminal, declaring "force majeure" after an "unlawful pipeline valve closure" halted operations at its main oil field.
Force majeure is a legal measure that frees a company from contractual obligations due to circumstances beyond its control.
Bumper oil prices boosted the share prices of energy companies because they lift revenues and profits. In turn, that helped guide most European stocks indices to higher ground on Monday.
- Asian stocks slide -
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However, Asian equities were locked in retreat on dimming hopes for a deep interest rate cut by the Federal Reserve, though all the firms on a new tech-focused board in China rallied on its opening day.
Traders took a step back after last week's gains as the New York Federal Reserve tempered comments from its president, John Williams, who had suggested the central bank could cut borrowing costs by 50 basis points at its policy meeting this month.
"Stocks (in Asia) are on the back foot as the market pares expectations for how deep the Fed will cut rates," said Neil Wilson, chief market analyst at London-based trading website Markets.com.
"Expectations for a 50 (point) cut are diminished and the market is now looking to the European Central Bank this week to see how dovish they go."
Bets that the Fed will only reduce rates by 25 points provided support to the dollar against most high-yielding, riskier currencies.
- Key figures around 1030 GMT -
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Brent North Sea crude: UP $1.25 at $63.72 per barrel
West Texas Intermediate: UP 87 cents at $56.50
London - FTSE 100: UP 0.4 percent at 7,534.81 points
Frankfurt - DAX 30: UP 0.2 percent at 12,284.70
Paris - CAC 40: UP 0.1 percent at 5,559.63
EURO STOXX 50: UP 0.2 percent at 3,486.31
Tokyo - Nikkei 225: DOWN 0.2 percent at 21,416.79 (close)
Hong Kong - Hang Seng: DOWN 1.4 percent at 28,371.26 (close)
Shanghai - Composite: DOWN 1.3 percent at 2,886.97 (close)
New York - Dow: DOWN 0.3 percent at 27,154.20 (close)
Euro/dollar: UP at $1.1223 from $1.1221 at 2100 GMT
Pound/dollar: DOWN at $1.2472 from $1.2502
Dollar/yen: UP at 107.87 yen from 107.71 yen