LONDON—Oil steadied on Monday after earlier hitting its highest in more than seven years on fears that a possible Russian invasion of Ukraine could trigger U.S. and European sanctions that would disrupt exports from one of the world’s top producers.
Brent crude was up 11 cents, or 0.1 percent, at $94.55 a barrel by 1107 GMT, after earlier hitting a peak of $96.16, the highest since October 2014.
U.S. West Texas Intermediate (WTI) crude rose 9 cents, or 0.1 percent, to $93.19 a barrel, after earlier hitting $94.94, the loftiest since September 2014.
“Market participants are concerned that a conflict between Russia and the Ukraine could disrupt supply,” said Giovanni Staunovo, commodity analyst at UBS.
He added that the oil market is very sensitive to any news of potential supply disruptions as oil inventories are low and producers’ spare capacity is expected to fall further.
Comments from the United States about an imminent attack by Russia on Ukraine have rattled global financial markets.
Russia could invade Ukraine at any time and might create a surprise pretext for an attack, the United States said on Sunday.
“If Russia invades Ukraine, crude oil and natural gas prices can be expected to surge significantly. In this case, Brent would probably exceed $100 per barrel,” said Commerzbank analyst Carsten Fritsch.
The tensions come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, struggle to ramp up production despite monthly pledges to increase output by 400,000 barrels per day (bpd) until March.
“Oil prices are once again coming under tremendous upward pressure as OPEC+ missed its output targets by a high 900,000 barrels in January,” said Pratibha Thaker, the Economist Intelligence Unit’s editorial director for Middle East and Africa.
The International Energy Agency’s (IEA) chief Fatih Birol on Monday urged OPEC+ to close the gap between its words and its actions.
Investors are also watching talks between the United States and Iran to revive the 2015 nuclear deal.
Iran’s foreign ministry spokesperson said on Monday that the talks have not reached a dead end.
“A nuclear deal between the U.S. and Iran could release 1.3 million barrels of supply, but this will not be sufficient to ease the supply constraints,” said Thaker.
