Fears that the Ukraine-Russia crisis would impair global supply are driving up oil prices.

On Tuesday, the price of Brent crude, a global benchmark, hit a seven-year high of $99.38 (£73) a barrel.

After recognising two rebel-held territories in Ukraine’s east as independent nations, Russia dispatched soldiers there.

The FTSE 100 stock index fell more than 1.4 percent in London before recovering some ground.

Asian stock markets ended the day down, while stock exchanges in the United States were bracing for losses.

Russia, the world’s second-largest oil exporter after Saudi Arabia, has been threatened with sanctions by the United Kingdom and other western allies. Russia is also the world’s leading natural gas producer.

Russia has stated that its forces will be involved in “peacekeeping” in the self-proclaimed people’s republics of Donetsk and Luhansk.

The United States, on the other hand, has argued that referring to them as peacekeepers is “nonsense” and that Russia is inventing a pretext for war.

According to Sue Trinh of Manulife Investment Management, the Ukraine-Russia issue might have “significant consequences” on oil prices.

She noted that sanctions requiring Russia to deliver less petroleum or natural gas would have a “significant impact on the world economy.”

Oil might rise beyond $100 per barrel, according to Maike Currie, an investment director at Fidelity International, owing to a combination of the Ukraine situation, a severe winter in the United States, and a lack of investment in oil and gas supplies throughout the world.

“Russia accounts for one in every 10 barrels of oil consumed globally, so it is a huge role when it comes to the price of oil, and of course, it’s really going to harm consumers at the fuel pumps,” she added.

For years, the US and EU have imposed sanctions on Russia, which have had a “huge impact” on the Russian economy.

Sanctions on financial institutions, technology such as chips, and individuals are expected to be “deepened,” according to Ms Currie.

Although Russia produces the majority of the oil and gas that the UK buys, if Russian supplies are restricted, wholesale prices are expected to rise throughout the world.

Share prices fell throughout the world, indicating that investors were concerned about the events, which came as the global economy continues to recover from the effects of the coronavirus outbreak.

The Nikkei 225 market in Japan sank 1.7 percent, while the Shanghai Composite dropped over 1%.

The Dax fell more than 2% in Berlin and the Cac-40 fell more than 1.5 percent in Paris at first, but both indexes recovered some ground.

Markets in the United States are expected to open lower as well.

According to Song Seng Wun, an economist at CIMB Private Banking, a probable conflict is on investors’ thoughts, placing markets in a “deep sea of red.”

“There is concern that freight and shipping prices, which are currently high, could rise further as a result of demand-supply disruptions,” he told reporters.