Oil prices soar 8% as Ukraine conflict stokes supply concerns

The session highs for U.S. distillates and gasoline futures also were the highest since 2014. Member countries of the International Energy Agency (IEA) discussed releasing 60 million barrels from oil stocks from their strategic petroleum reserves (SPR) in an effort to cool prices. "Oil's climbing the Ukraine war wall of worry," said John Kilduff, partner at Again Capital in New York. He said traders might have been disappointed that IEA countries were only looking to release about 60 million barrels from SPR.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, known as OPEC+, are due to meet on Wednesday. "OPEC(+) will likely stick to its original plan of a monthly 400,000 barrels per day (bpd) increase, which will not alleviate fears," said Tamas Varga at PVM Oil Associates.

A Russian armoured column bore down on Ukraine's capital Kyiv after deadly shelling of civilian areas in the country's second-largest city and Russia said its forces had cut off the Ukrainian military from the Sea of Azov north of the Black Sea. Russia's economic isolation deepened as the world's biggest shipping firm, Maersk, said it would halt container movement to and from Russia. Britain has banned all ships with any Russian connection from entering its ports.

"The fragile situation in Ukraine and financial and energy sanctions against Russia will keep the energy crisis stoked and oil well above $100 per barrel in the near-term, and even higher if the conflict escalates further," Louise Dickson, senior oil market analyst at Rystad Energy, wrote in a note.

Major oil and gas companies, including BP PLC and Shell PLC, have announced plans to exit Russian operations and joint ventures while TotalEnergies SA said it would not invest further capital in its Russian operations. Buyers of Russian oil are facing difficulty over payments and vessel availability owing to sanctions, with BP cancelling fuel oil loadings from a Russian Black Sea port.

Russia, which calls its actions in Ukraine a "special operation", exports 4 million to 5 million bpd of crude oil and 2 million to 3 million bpd of refined products.