Analysts said the oil market was spooked after Ukraine's acting president Oleksandr Turchynov yesterday accused Russia of waging war in his country's eastern rust belt and declared the launch of a "full-scale anti-terrorist operation" that left at least two dead. "The weekend news of rising tensions in eastern Ukraine and Russia have helped support the gains in Brent and WTI prices," Desmond Chua, market analyst at CMC markets in Singapore, told AFP. With Ukraine a key conduit for Russian gas to Europe, traders fear that any full-scale armed conflict will disrupt supplies and send oil and gas prices skyrocketing.
Russian deliveries account for 34 per cent of the natural gas supplies to the European Union, according to the Soufan Group, a US-based intelligence firm. Chua said dealers are keeping a close watch on Libya after its prime minister Abdullah al-Thani stepped down yesterday, saying that he and his family had been victims of an armed attack the previous day.