Global oil prices soared to the highest levels this year today as the Ukraine crisis fuelled concerns about global energy supplies, analysts said.
Brent North Sea crude for delivery in April rocketed USD 2.77 to stand at USD 111.84 a barrel in London midday deals.
New York's main contract, West Texas Intermediate (WTI) for April, jumped USD 1.94 to USD 104.53 a barrel. Ukraine accused Russia today of pouring extra troops and military planes into Crimea, a predominantly Russian-speaking peninsula in the southeast of the former Soviet state.
Crimea has been under de facto occupation by pro-Kremlin troops since President Vladimir Putin won parliament's authorisation Saturday to use force in Ukraine.
"The on-going uncertainty in Ukraine has caused further upside momentum to the oil market amid concerns about oil production issues," said Myrto Sokou, senior research analyst at Sucden brokers in London.
"Russia is the world's biggest oil producing country, so any political uncertainty could raise serious concerns about oil supplies issues worldwide."
Desmond Chua, an analyst at CMC Markets in Singapore, said that the escalating tension in Ukraine was providing strong support for oil prices.
"Considering that Ukraine is part of the supply chain for Brent, we are looking at this pent-up risk premium resulting in overshooting prices," Chua told AFP.
"Right now we would have our eyes on Ukraine, on the situation in Crimea... I do think that at least for the next couple of days this situation will be superseding any other market data," Chua added.
JP Morgan Commodities Research analysts noted that although Ukraine is neither a major oil producer nor oil consumer, it is an important transit country for Russian energy exports.
More than 70 per cent of Russia's gas and oil flows to Europe pass through its territory. In turn, Europe is the buyer for nearly 90 percent of Russia's oil exports.