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New York's main oil futures contract, light sweet crude for delivery in October, soared more than six dollars to 122.04 dollars per barrel at one point in Thursday trading, a level last seen in early August.
In London, Brent North Sea crude for October briefly rallied a similar amount to a two-week high of 120.93 dollars.
The New York contract later closed up 5.
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62 dollars at 121.18 dollars while Brent settled 5.80 dollars higher at 120.16 dollars.
"Prices have climbed ... on renewed geopolitical tensions between the US and Russia, with the latter voicing its displeasure over a US-Poland defense pact whereby the US can station defense shield (missiles) in Poland, much to Russia's dislike," said Barclays Capital analysts.
Russia strongly opposes Washington's plans to place elements of a missile defence system in Poland and the Czech Republic, charging that it poses a risk to its own security rather than offering protection against "rogue states" such as Iran.
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At the same time,