LONDON: Oil rose to its highest since 2014 on Tuesday after Moscow ordered troops into two breakaway regions in eastern Ukraine, adding to supply concerns that are pushing prices towards $100 a barrel.
Germany put the certification of the Nord Stream 2 gas pipeline from Russia on ice while the United States and European Union discussed potential sanctions as Ukraine reported continued shelling in east Ukraine.
"The potential for a rally over $100 a barrel has received an enormous boost," said Tamas Varga of oil broker PVM. "Those who have bet on such a move anticipated the escalation of the conflict."
Brent crude, the global benchmark, was up $1.93, or 2%, at $97.32 by 1448 GMT, having earlier reached its highest since September 2014 at $99.50.
US West Texas Intermediate (WTI) crude jumped by $2.96, or 3.3%, from Friday to $94.03, with the market having been closed on Monday for a public holiday. WTI also touched a seven-year high on Tuesday as it peaked at $96.
"We see the oil market in a period of frothiness and nervousness, spiced up by geopolitical fears and emotions," said Julius Baer analyst Norbert Rucker.
"Given the prevailing mood, oil prices may very likely climb into the triple digits in the near term."
The Ukraine crisis has added further support to an oil market that has surged on tight supplies as demand recovers from the COVID-19 pandemic.
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, have resisted calls to boost supply more rapidly.
A senior British minister on Tuesday said that Russia's move into Ukraine has created a situation as grave as the 1962 Cuban missile crisis, when a confrontation between the United States and Soviet Union brought the world to the brink of nuclear war.
Nigeria's minister of state for petroleum on Tuesday stuck to the OPEC+ view that more supply was not needed, citing the prospect of more production from Iran if its nuclear deal with world powers is revived.
Talks are ongoing on renewing Iran's nuclear agreement with world powers, which could eventually boost Iran's oil exports by more than 1 million barrels per day.