May Brent crude futures were up $5.14, or 5.25 percent, to $103.11 a barrel by 1145 GMT. The benchmark touched a seven-year high of $105.79 after the invasion began last week.
U.S. West Texas Intermediate (WTI) April crude futures were up $3.91, or 4.08 percent, at $99.63. The contract touched a high of $99.10 a barrel the previous day, ending up more than 4 percent.
A huge Russian military convoy approached Ukraine’s capital Kyiv on Tuesday after talks between Russia and Ukraine failed to reach a breakthrough.
Russia’s economic isolation deepened as the world’s biggest shipping firm Maersk on Tuesday said it would halt container movement to and from Russia. Britain meanwhile has banned all ships with any Russian connection from entering British ports.
“The fragile situation in Ukraine and financial and energy sanctions against Russia will keep the energy crisis stoked and oil well above $100 per barrel in the near-term and even higher if the conflict escalates further,” Louise Dickson, senior oil market analyst from Rystad Energy, wrote in a note.
Major oil and gas companies, including BP and Shell, have announced plans to exit Russian operations and joint ventures while Total said it would not invest further capital in its Russian operations.
Buyers of Russian oil are facing difficulty over payments and vessel availability due to sanctions with BP canceling fuel oil loadings from a Russian Black Sea port.
“OPEC will likely stick to its original plan of a monthly 400,000 bpd increase, which will not alleviate fears,” Tamas Varga, analyst at PVM Oil Associates, said.
The Organization of the Petroleum Exporting Countries and other producers—including Russia—will meet on Wednesday.
“The U.S. is coordinating an additional SPR (strategic petroleum reserve) release and today, the IEA’s extraordinary meeting should also address the issue of energy security. These might provide short-term relief,” Varga added.
The International Energy Agency (IEA) is set to hold an extraordinary ministerial meeting on Tuesday to discuss what role its members can play in stabilizing the oil market.
Meanwhile, Asia’s factories sustained a brisk recovery in February amid signs the coronavirus pandemic was having less of an impact on business, implying an uptick in oil demand.
Russia, which calls its actions in Ukraine a “special operation,” exports some 4 million to 5 million barrels per day of crude oil, and 2 million to 3 million barrels per day of refined products.
By Julia Payne