Escalation in the Russian-Ukrainian conflict pushed up global crude oil prices on Monday.
Accordingly, Brent-indexed crude oil prices rose 5 per cent to over $98 per barrel.
The rise in crude oil prices comes after the EU announced new sanctions on Russia.
Notably, Russia is the third largest producer of crude oil in the world.
Also Read | Indian equities open negative; Sensex, Nifty indices down 1.5% each
It is feared that any sanctions against Russia will curtail global supplies and stifle growth.
Last Friday, a rise in the US oil inventories along with assurance of energy supply from Russia had doused international crude oil prices.
Consequently, the price on last Friday came down to $95 per barrel after the Russia-Ukraine war pushed Brent Crude Oil prices to $105 per barrel.
For India, the price range is a cause of concern as it may add Rs 8-to-Rs 10 in petrol and diesel selling prices, if the OMCs decide to revise the current prices.
At present, India imports 85 per cent of its crude oil needs.
Besides, the cascading effect of higher fuel cost will trigger a general inflationary trend.
"Crude oil prices have rallied more than 5 per cent on Monday on potential supply disruption from Russia as Western countries moved ahead with hard sanctions along with exclusion of Russian banks from SWIFT system," said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
"The escalated tensions may keep the risk premium up in crude oil prices for short term."
According to Kshitij Purohit, Lead of Commodities and Currencies CapitalVia Global Research: "Early Monday, as the escalation of Western sanctions against Russia threatened to wreak further havoc on global markets."
"The European nation removed Russian banks from SWIFTs and the escalation of war from Russia and Ukraine are on the worrying stage."
According to IIFL Securities VP, Research, Anuj Gupta: "Brent Crude is trading higher by 4.40 per cent at $98.67 per barrel."
"We are expecting that crude may test $102 to $105 levels again."
