Crude oil futures were higher in mid-morning Asian trade March 1, as the market assesses the impact of restrictions on Russia's use of SWIFT international payment system amid looming threat of sanctions on Russia's energy sector.
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At 11:53 am Singapore time (0353 GMT), the ICE May Brent futures contract was up 71 cents/b (0.72%) from the previous close at $98.68/b, while the NYMEX April light sweet crude contract rose 70 cents/b (0.73%) at $96.42/b.
Over the weekend, the US, EU and Japan have imposed another round of sanctions on Russia, removing some of Russia's biggest financial institutions from the SWIFT international payment system.
There is also mounting pressure on the US, EU to target Russian energy exports in response to the Russian invasion, with Ukraine's foreign minister Dmytro Kuleba tweeted over the weekend, urging Western governments to impose a "full embargo for Russian oil and gas."
"The oil market will remain very volatile as the risk of losing access to Russian energy supplies grows," Edward Moya, senior market analyst with Oanda said in a note on March 1.
"The uncertainty over how the Ukraine war will unfold has too many risks that include nuclear threats, which means any oil price dips on any strategic release announcement will be short-lived," Moya added.
Meanwhile, Shell, BP and Equinor have all voiced plans to exit Russia, with BP divesting its stake from Rosneft and Shell quitting the flagship Sakhalin 2 LNG plant jointly managed with Gazprom.
"The sanctions and the exodus of Western oil companies are likely in the medium to long term to result in lower Russian oil and gas production because they will make investments in maintaining production and developing new sources significantly more difficult," Carsten Fritsch from Commerzbank said in a report on March 1.
In the US, crude oil stocks for the week ended Feb. 25 likely climbed by 2.3 million barrels on the back of lower refinery runs, according to analysts surveyed Feb. 28 by S&P Global Platts.
A 2.3-million barrel build would put US crude stocks at 418.3 million barrels, roughly 10% below the five-year average. The US Energy Information Administration will release its data later in the day on March 1.
Elsewhere, OPEC+ is largely expected to stay with its planned output increase of 400,000 b/d despite global calls for increased output.