Oil prices surged Tuesday morning on fears that rising tensions between the Ukraine and Russia could disrupt supplies around the world.

The United States and its European allies are poised to announce new sanctions against Russia after President Vladimir Putin formally recognised the two regions in eastern Ukraine, escalating a security crisis on the continent.

Brent, the international benchmark for oil, was trading at close to 100 U.S. dollars a barrel, its highest level since 2014, as military tanks and carriers were seen on the outskirts of Donetsk, the capital of one of two independent regions of Eastern Ukraine.

The crisis over Ukraine has added further support to an oil market that has surged due to tight supplies as demand recovers from the coronavirus pandemic.

The Organization of the Petroleum Exporting Countries (OPEC) has resisted calls to boost supply more rapidly.

The conflict has fueled a seven percent increase in natural gas prices despite assurances from Putin that Russia will continue to deliver uninterrupted natural gas supplies to world markets.

Russia is the world’s largest exporter of natural gas and produces 12 percent of the world’s oil.

The tension between Russia and Ukraine also had a negative impact on global stock markets.

Tokyo’s Nikkei 225 index dropped 1.8 percent and the Hang Seng in Hong Kong fell 3.2 percent in early trading.

The majority of European stock exchanges are also down. Several of Africa’s exchanges are either down or flat.

Gold, which was already soaring prior to the Ukraine crisis, hit a peak of eight months, surging by more than 1,900 U.S. dollars per ounce. Aluminum hit a more than 13-year high of 3,350 U.S. dollars a tonne while benchmark nickel prices reached the highest level since August 2011

Story compiled with assistance from wire reports