$300 A Barrel, "Catastrophic Consequences" If Russian Oil Banned: Moscow

Oil prices see-sawed on Tuesday even as Ukraine peace talks made little headway, torn between the prospect of a ban on Russian oil imports and Russia's warning crude costs could rise to $300 a barrel.

After the third attempt by Russia and Ukraine at talks in Belarus, a Ukrainian negotiator said although little progress on agreeing with logistics for the evacuation of civilians had been made, things remained essentially unchanged.

Benchmark Brent crude oil, which briefly hit more than $139 a barrel in the previous session, jumped around in morning trade on Tuesday and was up nearly 1 per cent at about $124 per barrel.

U.S. crude was up about 0.4 per cent at $119.86 a barrel. At the same time, prices of other commodities, including nickel, rose as industrial buyers and traders scrambled with the Russian-Ukraine conflict showing no signs of cooling.

Crude oil prices spiked to their highest levels since 2008 on Monday after U.S. Secretary of State Antony Blinken said Washington and European allies were considering banning oil imports from Russia in response to its invasion of Ukraine.

A Reuters report showed Western countries could face oil prices of over $300 per barrel and the possible closure of the main Russia-Germany gas pipeline if governments follow through on threats to cut energy supplies from Russia, according to a senior minister on Monday.

"It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market," Russian Deputy Prime Minister Alexander Novak said in a statement on state television.

"The surge in prices would be unpredictable. It would be $300 per barrel if not more."

Mr Novak said it would take Europe more than a year to replace the volume of oil it receives from Russia, and it would have to pay significantly higher prices.

The rally in oil and other commodities prices will only increase the global inflationary pulse.

"Global risk sentiment started the week deeply negative, before improving as European leaders indicated they would resist sanctions on Russian energy exports, preferring instead a determined strategy to reduce dependency on Russian imports," ANZ analysts said in a note.

"Markets are volatile, however, and highly sensitive to shifts in tone. The progressive rise in breakeven inflation rates is evidence of mounting inflation concerns as commodity prices remain firmly underpinned," they added.