NEW DELHI: Oil prices are rising due to fears that the Ukraine-Russia situation would disrupt global supply systems. Brent crude futures hit a seven-year high of about USD98 on Tuesday after Russia recognised breakaway rebel regions in Ukraine's east as independent states, as per BBC report.

Sanctions have been threatened against the country by the United Kingdom and other Western allies. After Saudi Arabia, Russia is the world's second-largest crude oil exporter. It is also the world's leading natural gas producer.

According to Sue Trinh of Manulife Investment Management, border tensions might have "significant ramifications." According to the research, sanctions requiring Russia to deliver less petroleum or natural gas would have a "significant impact on the world economy." Western governments are concerned that Putin's endorsement of rebel-held territory may allow Russian forces to enter Ukraine's east.

Russia-backed separatists have been fighting Ukrainian soldiers since 2014 in the self-proclaimed People's Republics of Donetsk and Luhansk. The move by Russia basically puts a stop to peace talks in the region, which has been operating under a shaky ceasefire for years.

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