Brent rises above a seven-year high due to Middle East tensions and low supply.

Oil prices jumped more than a dollar to a seven-year high on Tuesday, fueled by fears of supply interruptions following Yemen's Houthi party's attack on the United Arab Emirates, increasing hostilities between the Iran-aligned group and a Saudi-led coalition.

In a note, an ANZ Research analyst noted that the "new geopolitical stress adds to ongoing indicators of tightness across the market."

Brent crude futures were up $1.01, or 1.2 percent, to $87.48 a barrel by 0316 GMT, following touching an all-time high of $87.55 on Oct. 29, 2014.

From Friday's settlement, U.S. West Texas Intermediate (WTI) crude futures surged $1.32, or 1.6 percent, to a three-month high of $85.14 per barrel. Due to the fact that Monday was a federal holiday in the United States, trade was light.

After an incident at its Mussafah fuel depot, UAE oil major ADNOC said it has implemented business continuity procedures to ensure continued supply of products to its local and international clients.

Oil prices are being maintained, according to CommSec analysts, by colder winter weather in the northern hemisphere, which are pushing up demand for heating fuels.

According to analysts, the tight supply-demand balance is unlikely to improve as some producers within the Organization of Petroleum Exporting Countries struggle to pump at their permitted capacities due to underinvestment and outages, despite an agreement with Russia and allies to add 400,000 barrels per day each month.

"This should continue to strengthen oil and increase discussion of triple-digit prices," said Craig Erlam, an analyst at OANDA.