Editor’s note: This story was updated from a previous version posted at 4:15 a.m. CT.

Oil prices jumped on Feb. 24, with Brent rising above $105/bbl for the first time since 2014, after Russia’s attack on Ukraine exacerbated concerns about disruptions to global energy supply.

Russia launched an all-out invasion of Ukraine by land, air and sea in the biggest attack by one state against another in Europe since World War Two.

The U.S. and Europe have promised the toughest sanctions on Russia in response.

“If sanctions affect payment transactions, Russian banks and possibly also the insurance that covers Russian oil and gas deliveries, supply outages cannot be excluded,” Commerzbank analyst Carsten Fritsch said.

At least three major buyers of Russian oil were unable to open letters of credit from Western banks to cover purchases on Feb. 24, sources told Reuters.

Brent crude was up $7.26, or 7.5%, at $104.10/bbl as of 1437 GMT, having touched a high of $105.79. WTI crude futures in the U.S. jumped $6.63, or 7.2%, to $98.73.

Brent and WTI hit their highest since August and July 2014 respectively.

“Russia is the third-largest oil producer and second-largest oil exporter. Given low inventories and dwindling spare capacity, the oil market cannot afford large supply disruptions,” UBS analyst Giovanni Staunovo said.

“Supply concerns may also spur oil stockpiling activity, which supports prices.”

RELATED:

Oil Majors, Commodity Traders at Risk from New Sanctions on Russia

Russia is also the largest provider of natural gas to Europe, providing about 35% of its supply.

U.K. Prime Minister Boris Johnson said Britain and its allies would unleash a massive package of economic sanctions on Russia and that the West must end its reliance on Russian oil and gas.

China warned of the impact of tensions on the stability of the energy market.

“All countries that are truly responsible should take responsible actions to jointly maintain global energy security,” a Chinese foreign ministry spokesperson said.

Global oil supplies remain tight as demand recovers from pandemic lows. Read full story

Reflecting the tightness, premiums on crude contracts for loading in one month over contracts for loadings in six months, a metric closely watched by traders, hit a record high at $11.55/bbl.

“This growing uncertainty during a time when the oil market is already tight does leave it vulnerable, and so prices are likely to remain volatile and elevated,” said Warren Patterson, head of ING's commodity research.

Analysts say Brent is likely to remain above $100/bbl until significant alternative supplies become available from U.S. shale or Iran, for example.

The U.S. and Iran have been engaged in indirect nuclear talks in Vienna that could lead to the removal of sanctions on Iranian oil sales.

Iran’s top security official Ali Shamkhani said on Twitter on Feb. 24 that it is possible to achieve a good nuclear agreement with Western powers after significant progress in negotiations.

Analysts are warning of inflationary pressure on the global economy from $100 oil, especially for Asia, which imports most of its energy needs.

“Asia’s Achilles heel remains its vast import needs for energy, with surging oil prices bound to take a hefty bite out of income and growth over the coming year,” said HSBC economist Frederic Neumann.