Oil price continues to rise on supply concerns amid conflict in Ukraine

The oil prices rose on Tuesday, amid concerns about a supply disruption following the invasion of Ukraine and sanctions against Russia, overshadowing reports of a coordinated release of global crude stocks as an emergency measure.

May Brent oil futures were up $4.02, or 4.01%, at $101.99 a barrel at 10:02 GMT. The benchmark contract hit a seven-year high of $105.79 after Russian forces’ occupation of Ukraine began last week.

US West Texas Intermediate crude futures for April delivery added $3.24, or 3.38%, to $98.96 a barrel. WTI prices hit a high of US$99.10 a barrel the day before, closing up more than 4%.

A huge military convoy from Russia was approaching the Ukrainian capital Kiev on Tuesday after ceasefire talks between the sides failed to advance on Monday.

Russia’s economic isolation worsened when the world’s largest shipping company, Maersk, said on Tuesday it would halt container shipments to and from Russia.

“The fragile situation in Ukraine and the financial and energy sanctions against Russia will sustain an acute crisis and oil will be well above US$100 a barrel in the short term, or even higher, if the conflict escalates.said Louise Dickson, senior oil market analyst at Rystad, in a note sent to clients.

Major oil and gas companies, including BP and Shell, have announced plans to exit Russian operations and joint ventures.

Russian oil buyers are facing difficulties with payments and vessel availability due to sanctions imposed on BP for canceling fuel oil cargoes from a Russian Black Sea port.

Still, market confidence was offset in part by the fact that the United States and its allies are discussing a coordinated release of crude stocks to mitigate the supply disruption. The measure could reach between 60 million and 70 million barrels, media reported.

With information from Reuters