Oil price falls on easing fears over supplies from Russia and Ukraine

The oil prices They fell on Wednesday, falling away from seven-year highs hit the day before, after it became clear that the first round of US and European sanctions against Russia are unlikely to disrupt crude supplies.

At 10:27 GMT, Brent crude futures were down 59 cents, or 0.6%, at $96.25 a barrel, after touching $99.50 on Tuesday, their highest level since September 2014.

US West Texas Intermediate (WTI) oil futures fell 76 cents, or 0.8%, to $91.15 a barrel, after hitting $96 on Tuesday.

Prices soared on Tuesday on fears that Western sanctions against Russia for sending troops to two breakaway regions in eastern Ukraine could hit energy supplies.

Sanctions imposed by the United States, the European Union, the United Kingdom, Australia, Canada and Japan targeted Russian banks and elites, while Germany halted a major gas pipeline project from Russia. But the United States has made it clear that the sanctions agreed upon and those that could be imposed will not target oil and gas flows.

However, analysts expect oil prices to continue to be supported by the Russia-Ukraine crisis for now, with some Western countries vowing to impose more sanctions if Russia launches an all-out invasion of its neighbor.

“The prospect of more conflict in Ukraine should safeguard the geopolitical risk premiumsaid Stephen Brennock of the PVM Oil brokerage.

“There is a risk that Russia will retaliate for sanctions by cutting deliveries on its own”, said Carsten Fritsch, an analyst at Commerzbank.

The possible return of more Iranian crude to the market further pressured oil prices on Wednesday, as Tehran and world powers inch closer to reviving a nuclear deal.

“The nuclear talks in Vienna are reaching a sensitive and important point”, Iranian Foreign Minister Hossein Amirabdollahian said on Wednesday.

With information from Reuters

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