The FTSE-100 Index clawed back some of its early session losses thanks to a positive start to trading on Wall Street, but remained in the red - closing down 10.9 points at 6430.1.
Investors have retreated to safe-haven assets, such as gold and government bonds, amid fears the Middle East tensions have the potential to trigger a major disruption to oil supply, even though Syria is not a major producer.
London Brent oil prices saw their biggest one-day rally in six months on Tuesday and were up another 0.4% to 115.6 US dollars a barrel yesterday, while the price of US crude jumped to its highest level since May 2011 at one stage.
The benchmark New York rate rose to 112.24 dollars a barrel before falling back to 110 dollars.
New Bank of England governor Mark Carney's first UK public speech helped the pound move higher against most major currencies, except the dollar.
The central bank boss sought to reassure over its forward guidance, confirming that interest rates were not likely to be raised for at least three years, while he said more economy boosting measures would be considered if market expectations of rates hindered the recovery.
Sterling was 0.2% lower against the dollar, but 0.4% up against the euro.
Banks also rose as Mr Carney unveiled details of a £90 billion boost to lending as he said well-capitalised lenders will be allowed to lower their reserves of liquid assets such as cash and bonds. Royal Bank of Scotland led bank gains up 5.9p to 336p.
Fears rising oil prices will reverse recent declines in fuel costs meant British Airways owner International Airlines Group fell 4%, or 13.5p, to 287p and easyJet declined 22p to 1212p.
Industrial stocks with a dependency on stable oil prices and global economic conditions also suffered, with engines giant Rolls-Royce down 22p to 1092p and car parts firm GKN off 7.3p to 324.1p. Energy stocks benefited from the situation as Royal Dutch Shell rose 44p to 2221p, BP lifted 5.6p to 452.7p and exploration firm BG added 57.5p to 1267.5p.
In corporate news, private security group G4S was one of the biggest top flight risers after it unveiled plans to shore up its balance sheet.
The City's response to the £600 milllion fundraising, involving the sale of new shares and disposal of non-core businesses, was initially lukewarm but shares later surged 7.1p higher to 252.4p.
Other big FTSE-100 risers were Eurasian Natural Resources up 12.6p to 227.6p, and Anglo American up 33p to 1530.5p.
Other heavy fallers on the FTSE-100 were Legal & General off 6.7p to 187.4p, Randgold Resources 140p lower at 5195p and Associated British Foods down 49p to 1838p.