TOKYO- Oil prices climbed to nearly three-week highs on Monday as fears over tight global supply grew, with the deepening crisis in Ukraine raising the prospect of heavier sanctions by the West on top exporter Russia.
Brent futures were up $1.09, or 1.0 percent, at $112.79 a barrel at 0445 GMT, after hitting its highest since March 30 of $113.80 earlier in the session.
US West Texas Intermediate futures rose $1.00, or 0.9 percent, to $107.95 a barrel, having gained to as high as $108.55, the highest since March 30.
Ahead of Easter weekend holidays, both contracts gained more than 2.5 percent on Thursday on news that the European Union might phase in a ban on Russian oil imports.
EU governments said last week the bloc’s executive was drafting proposals to ban Russian crude, but diplomats said Germany was not actively supporting an immediate embargo.
Those comments came before tensions grew in the Ukraine crisis over the weekend, with Ukrainian soldiers resisting a Russian ultimatum to lay down arms on Sunday in the pulverized port of Mariupol. Moscow, which calls its actions in Ukraine a “special operation”, said its forces had almost completely seized the city.
“Continued war between Russia and Ukraine with no signs of a ceasefire fueled supply fears, especially as demand is expected to pick up as driving season nears in the northern hemisphere,” said Chiyoki Chen, chief analyst at Sunward Trading.
The International Energy Agency had warned that roughly 3 million barrels per day (bpd) of Russian oil could be shut in from May onwards due to sanctions, or buyers voluntarily shunning Russian cargoes.
Russian oil production has continued to slide in April, declining by 7.5 percent in the first half of the month from March, the Interfax news agency reported on Friday.
“The oil market will likely stay on a bullish trend this week with limited additional supply coming from major oil producers to offset a reduced flow from Russia,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
