Oil nearly scaled to the $100 a barrel mark for the first time since September 2014 on Tuesday as tensions between Russia and Ukraine escalated after Moscow ordered troops into two breakaway regions in eastern Ukraine.

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Brent crude, the global benchmark, was up $4.11 or 4.30 percent, at $99.50 at the day's high, which is the highest since September 2014.

US West Texas Intermediate (WTI) crude jumped $3.64, or 4 percent, to $94.62 versus Friday's settlement, having earlier reached $96, also the highest since 2014.

Moscow's move drew international condemnation with US and other allies planning to announce new sanctions on Russia, the world's second-largest oil producer. This has added to supply concerns as demand recovers from the coronavirus pandemic.

Also Read | Explained: Russia-Ukraine conflict and its impact on commodities

It was unlikely US and European governments would impose oil or gas sanctions on Russia if it invaded Ukraine further, as that would inflict pain on themselves, Commonwealth Bank analyst Vivek Dhar told news agency Reuters. He, however, added, Russia itself could hold back oil and gas supplies if it sought to retaliate against any other sanctions imposed by the West.

Earlier in the day, Jahangir Aziz, Head of Emerging Markets Economics Research & Commodities, JPMorgan told CNBC-TV18 that if Russia-Ukraine tensions escalate and continue for the next three or four months, oil can easily breach $110, $115 a barrel, at least till summer.

However, more crude may come to the market on a possible nuclear deal between Iran and world powers. Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) have resisted calls to boost supply more rapidly.

Analysts earlier suggested the market remained tight, and any addition of oil would help but prices would remain volatile in the near term as Iranian crude would only likely return later this year.

The Russia-Ukraine crisis and rising crude oil prices have triggered a sell-off in the global market.

Domestic benchmark indices ended lower with IT and oil and gas shares pulling them lower, amid a broader sell-off. Sensex finished at 57,300.68, down 382.91 points or 0.66 percent. Nifty50 shed 114.45 points or 0.67 percent to settle at 17,092.20.

Also Read: Oil and gas shares mixed: BPCL sinks 3.5%, Indraprastha Gas down 4%, ONGC top gainer amid supply disruption concerns

Shares in Asia-Pacific declined as tensions surrounding Russia and Ukraine continued to keep investors on edge. Hong Kong’s Hang Seng index led losses regionally, falling 2.69 percent to close at 23,520. Nikkei225 index in Japan down 461.26 points or 1.71 percent at 26,449.61.

US and European markets braced for sharp losses at the opening bell, with S&P 500 futures down 1.4 percent, Nasdaq futures off 1.9 percent, the pan-region Euro Stoxx 50 futures 1.1 percent lower, and FTSE futures down 0.6 percent.

(With text inputs from Reuters)

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(Edited by : Abhishek Jha)

First Published:Feb 22, 2022 5:09 PM IST