Oil prices are edging towards a 2014 high as tensions continue to mount between Russia and the West.
Brent crude oil traded near a two-week high around $108 a barrel on Monday – just a few dollars away from the $111 high reached in February.
US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held talks on Sunday about ways to defuse the crisis over Ukraine, with Mr Kerry telling Moscow progress depended on a Russian troop pullback from Ukraine’s borders.
The West is considering more sanctions on Russian industries including its oil and gas sector after the annexation of Crimea, and Russian military manoeuvres close to Ukraine’s borders are keeping investors on edge.
Investors worry that sanctions could lead to a disruption of Russian energy supplies, on which Europe relies heavily.
“Russian supply risks are keeping the market on edge,” said Carsten Fritsch, senior commodities analyst at Commerzbank.
“It would be impossible to replace Russian oil and gas in the short term, and it would be economic suicide for Europe to jeopardise those supplies.
“That’s why the risks of any disruption are probably very low.”
Meanwhile, BP has appointed a new head of its Russian business with immediate effect.
David Campbell, who is currently head of the group chief executive’s office in London, will become president of BP Russia.
BP is the biggest foreign investor in Russia’s oil sector through its stake of under 20% in the Kremlin’s state oil champion Rosneft.
BP’s Russian business produces more than a quarter of its worldwide oil output and holds more than a third of its oil and gas reserves.
Between 2003 and 2007, Campbell was based in Russia as a senior employee of TNK-BP, the company’s Russian joint venture which was last year sold to Rosneft.