Oil futures: Crude jumps as markets weigh Russia sanctions, Ukraine conflict

0825 GMT: Crude oil futures jumped Feb. 28 in early London trading as markets weighed the impact of tougher financial sanctions on Russia against reports of possible negotiations between Ukraine's government and the Kremlin.

May ICE Brent trading at $101.58/b at 0825 GMT, up $3.65/b from the previous settlement. Prices had clawed back slightly after ICE May Brent was trading as high $105.07/b in Asian morning trading. April Nymex WTI was at $95.26/b, up $3.67/b, at the same time.

The US and its coalition of allies have blocked some Russian banks from accessing the SWIFT international payment system, amongst a package of financial sanctions, which could make it harder for trading companies to transact with counterparties.

Russia is the largest producer in the OPEC+ alliance alongside Saudi Arabia, accounting for about 10% of total global supply. Urals crude is a staple for refiners in Northwest Europe and the Mediterranean. Key buyers include Germany, Italy, the Netherlands, Poland, Finland, Lithuania, Greece, Romania, Turkey and Bulgaria. Russia is also a major supplier to the US and China.

Focus is also on the meeting this week of the OPEC+ producer alliance. Russia's economic allies in the cartel have distanced themselves from the international campaign to isolate Moscow and avoided criticizing the Kremlin's actions. Saudi Arabia's Crown Prince Mohammed bin Salman reiterated his country's commitment to the OPEC+ agreement in a call with French President Emanuel Macron, according to the official Saudi Press Agency late Feb. 27.

Higher oil prices may provoke consumer nations to release more crude from their Strategic Petroleum Reserves. The head of India's SPR in an interview with S&P Global Platts Feb. 28 said more oil could be released from stockpiles if required. The US has continued to flag more sales from its SPR as part of a coordinated release as a strategy to ease prices.

Focus is also turning to energy security and reducing dependence on Russian oil and gas. UK Foreign Secretary Liz Truss said Feb. 27 that G7 consumers should consider limiting the amount of oil and gas imported from Russia.

"I would support the idea of having ceilings on how much oil and gas is imported from Russia," Truss told Sky News in a television interview.

Reports of escalating violence in Ukraine following Russia's invasion on Feb. 24 are being tempered by reports of possible negotiations between the Kremlin and the Ukrainian government. However, President Vladimir Putin raised fears over the weekend by placing his country's nuclear forces on a higher state of alert.

Markets are also watching the security of shipping in and around the Black Sea. Russia has restricted access to the Sea of Azov and shipping in the region has been disrupted by the conflict.