The price of oil shot up nearly $3 a barrel yesterday amid fears in the oil market that Iraqi leader Saddam Hussein might make good on his weekend threat to attack the rich Saudi Arabian oil fields and cause a catastrophic worldwide energy shortage.

The huge jump in the crude oil price, to $38.25 a barrel -- a $2.82 rise -- was accompanied by increases of nearly 7 cents a gallon in wholesale gasoline and heating oil prices. Some of those increases will be passed on to consumers at the gas pump and in heating bills in weeks to come, although a number of oil companies have limited their retail price increases to avoid charges of price gouging.

Yesterday's oil price surge sent shock waves through other financial markets in the United States and abroad.

The Dow Jones industrial average fell nearly 60 points to its lowest level in more than a year, as worries about the effects of higher oil prices on corporate profits and the economy in general piled onto investors' concerns about financial problems at some of the nation's big banks. Analysts said action in the stock market yesterday closely tracked movements in oil prices. {Story on Page D1.}

Because the cost of energy affects so many sectors of the economy, oil prices have become an economic keystone, with implications for everything from the cost of transportation to the budget deficit to the balance of trade.

Bond prices tumbled and the dollar fell against most major currencies, while gold -- the traditional investment of choice in uncertain financial times -- moved sharply higher, rising $13.60 to close above $400 on the New York Commodity Exchange.

The 30-year Treasury bond fell $5.94 per $1,000 face amount, while its yield, which rises when the price falls, climbed to 9.17 percent from 9.11 percent.

Share prices on the Tokyo Stock Exchange fell in trading today, with the Nikkei Stock Average of 225 selected issues losing 1.76 percent by the close of the session. Japanese financial markets were closed yesterday for a national holiday. Other foreign stock markets were down sharply yesterday.

In Toyko currency trading, the dollar ended morning trading today at 136.88 yen, down 0.45 yen from Friday's close. In New York yesterday, the dollar was quoted at 137.50 yen, up from 136.65 yen Friday.

Many experts said the financial markets -- particularly the oil futures market -- seemed to be taking the outbreak of war in the Middle East as a foregone conclusion.

"Hussein -- boy, he's saying all the right things. It's very dangerous," said Michael McDermott, an oil trader at Paine Webber Inc. in New York. "People think a military solution is close."

"This is fear and trembling," said John Lichtblau, executive director of the Petroleum Industry Research Foundation, a New York consulting firm. "The market is very super-sensitive to these kinds of statements, and I think that is what's driven the price to where it is."

At one point during the day, the price of a benchmark barrel of crude oil rose to $39.20 on the New York Mercantile Exchange, and traders said $40 oil -- unthinkable a few days ago -- now appears to be inevitable. Less than three months ago, before Iraq invaded Kuwait, the price of crude oil was about $16 a barrel.

"We've had very few pauses in this upward thrust. There's no telling how high {the price} could go, simply because this is war psychology," said Eugene Nowak, an oil industry analyst at Dean Witter Reynolds in New York.

Nowak and other analysts noted that speculation about an outbreak of hostilities in the Middle East was overriding the realities of supply and demand.

With Saudi Arabia and other oil nations raising production in recent weeks to cover oil lost when the United Nations imposed an embargo on shipments of oil from Iraq and Kuwait, the world supply of oil is close to what it was before the invasion -- yet prices continue to spiral.

Yesterday, the Saudi finance minister, Mohammed Abalkhail, told a meeting of the International Monetary Fund and World Bank in Washington that Saudi Arabia had increased its production to maximum levels -- about 7.5 million barrels a day, by most analysts' reckonings, compared with 5.2 million barrels a day before the Iraqi invasion.

Some analysts believe the Saudis may be able to increase production still further in coming months by reactivating mothballed facilities.

The prospect that Saudi production could somehow be disrupted by an Iraqi attack rattles oil markets, since Saudi Arabia is the largest oil producer in the Middle East and the one most friendly to the West.

"The reason for this price escalation is the not-unrealistic fear that something will go wrong there," Lichtblau said. "If Saudi Arabian production were even partly reduced by damage, it would create real shortages."

However, Lichtblau and many other experts question just how much damage Iraq could do to Saudi oil-producing and shipping facilities, noting that Iraq's eight-year war with Iran scarcely disrupted Iranian production or shipments.

Although it is the principal cause of the rise in oil prices, concern about the tension in the Middle East isn't the only thing driving crude costs higher.

With the world oil supply-demand equation tight, there also are worries about a possible strike by Soviet oil workers and a round of scheduled and emergency refinery shutdowns in the United States and abroad.

Even a report that the Farmer's Almanac was predicting a cold winter sent shivers through the oil market, since cold weather could increase heating oil demand and further tighten supplies.

"It's not exactly scientific, but the market doesn't ignore that," Lichtblau said of the almanac's prediction.