London (TIP)-Oil prices surged on Wednesday, March 2,  as supply disruption fears mounted following hefty sanctions on Russian banks amid the intensifying Ukraine conflict, while traders scrambled to seek alternative oil sources in an already tight market.

Brent crude futures rose by more than $8, touching a peak of $113.02 a barrel, the highest since June 2014, before easing to $111.17, up by $6.20 or 5.9% by 0950 GMT.

US West Texas Intermediate (WTI) crude futures also jumped more than $8 a barrel, hitting the highest since August 2013 before losing some steam to trade up $5.86 or 5.7% to $109.27 a barrel.

“Due to limited diversification options, any disruption to Russia’s energy exports will result in another energy crisis in Europe,” said Kaho Yu, principal Asia analyst at risk consultancy Verisk Maplecroft.

“Although the US has called for a global oil reserve release, oil prices are likely to remain above $100 unless significant alternative supplies enter the market.” Russian oil exports account for around 8% of global supply.

Exxon Mobil on Tuesday said it would exit Russia oil and gas operations as a result of Moscow’s invasion of Ukraine. The decision will see the firm pull out of managing large production facilities on Sakhalin Island in Russia’s Far East.

While Western powers have not imposed sanctions on energy exports directly, US traders at hubs in New York and the US Gulf are shunning Russian crude.           Source: Reuters