Oil prices soared nearly $2 per barrel in early trade on Friday as Russia's invasion of Ukraine continued to inflame global supply concerns as markets brace for the impact of trade sanctions on major crude exporter Russia.
Global benchmark Brent crude rose $1.99, or 2%, to $101.07 a barrel around 0155 GMT on Friday. U.S. West Texas Intermediate (WTI) crude CLc1 climbed $1.89, or 2% to $94.70 a barrel.
The attack on Ukraine caused prices to surge to more than $100 a barrel for the first time since 2014 on Thursday, with Brent touching $105, before paring gains by the close of trade.
The massed Russian assault by land, sea and air was the biggest attack on a European state since World War Two, prompting tens of thousands of people to flee their homes.
"Oil markets are particularly vulnerable to supply shocks given global oil stockpiles are at seven-year lows," said Commonwealth Bank analyst Vivek Dhar in a note.
U.S. President Joe Biden hit Russia with a wave of sanctions on Thursday after Moscow invaded Ukraine, measures that impede Russia's ability to do business in major currencies along with sanctions against banks and state-owned enterprises.
"OPEC+ spare oil capacity has come under question due to disappointing OPEC+ supply growth," Dhar wrote, referring to the Organization of the Petroleum Exporting Countries (OPEC) and allied producers - including Russia - and problems they have experienced in boosting production. Output by OPEC members in January was below a rise planned under a deal with allies, according to a Reuters survey.
While the Biden administration has indicated it may look to release strategic oil stockpiles to address high prices, "history suggests that any drawdown on strategic oil stockpiles will likely only provide temporary relief from high oil prices," added Dhar.
Nigeria's petroleum minister has also said that there is no need for OPEC+ to expand planned oil production as a potential deal between Iran and world powers will increase supplies.
The U.S. and Iran have been engaged in indirect nuclear talks in Vienna, in which a deal could lead to the removal of sanctions on Iranian oil sales and increase global supply.
Iranian officials said on Twitter on Thursday that Western partners in the nuclear talks have to make decisions on crucial issues to help reach an agreement.