Oil prices jumped more than $2 to a fresh seven-year high on Tuesday after Moscow ordered troops into two breakaway regions in eastern Ukraine, escalating a crisis that western leaders have warned could spark a war.
US and European officials condemned the moves, but a Biden administration official said Russia's military action did not as yet constitute an invasion that would trigger a broader sanctions package.
Brent crude futures rose $2.10, or 2.2 per cent, to $97.49 a barrel at 0132 GMT, adding to a 2 per cent gain on Monday. Earlier on Tuesday it hit $97.66, its highest since September 2014.
US West Texas Intermediate (WTI) crude futures jumped $3.25, or 3.6 per cent, to $94.32 a barrel versus Friday's settlement. The US market was closed on Monday for a public holiday.
Responding to the Russian troop movements after Moscow recognised two breakaway regions as independent, Ukrainian President Volodymir Zelensky accused Russia of violating Ukraine's sovereign territory, in an address to the nation early on Tuesday.
He said his country wanted a diplomatic solution to the crisis but was ready to dig in for the long haul.
Analysts say the big question hanging over the oil market is whether Russian energy exports would actually be disrupted if Moscow went ahead with a fullscale invasion of Ukraine and western governments imposed sanctions against Russian financial institutions.
"There's a lot of uncertainty," Westpac senior economist Justin Smirk said. "Will Russia be willing to supply on credit?"
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