The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019.
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. Reuters / ANGUS MORDANT

Oil eased on Monday from its highest in more than seven years as Ukraine hinted at possible concessions to Russia that could alleviate tensions between the two countries that Western governments say are on the brink of war.

Brent crude rose 5 cents to $94.49 a barrel by 10:55 a.m. EST (1555 GMT), after touching its highest since October 2014 at $96.16.

U.S. West Texas Intermediate (WTI) crude rose 46 cents to $93.56 a barrel, after hitting $94.94, the loftiest since September 2014.

Comments from the United States about an imminent attack by Russia on Ukraine have rattled global financial markets. [MKTS/GLOB]

Russia could invade Ukraine at any time and might create a surprise pretext for an attack, the United States said on Sunday. Moscow denies that it plans to invade and has accused the West of hysteria.

Markets later cooled as Ukrainian Ambassador Vadym Prystaiko said Ukraine was prepared to make some concessions to Russia.

"The developments in Eastern Europe will be crucial for the global market as Russia is one of the biggest crude oil producers with a capacity of about 11.2 million bpd (barrels per day)," said Nishant Bhushan, senior oil market analyst for Rystad Energy.

"Any disruption of oil flows from the region would send Brent and WTI prices skyrocketing higher far above $100, in a market struggling to supply the increased demand for crude as economies recover from the pandemic."

Supplies have been stretched as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, have struggled to deliver monthly pledges to increase output by 400,000 barrels per day (bpd) until March.

International Energy Agency (IEA) chief Fatih Birol urged OPEC+ to close the gap between words and its actions. The IEA has said the gap has widened between the OPEC+ target and actual output.

Investors are also watching talks between the United States and Iran. The Iranian foreign minister said Iran was "in a hurry" to reach a swift agreement in nuclear talks in Vienna, provided its national interests are protected.

"A nuclear deal between the United States and Iran could release 1.3 million barrels of supply, but this will not be sufficient to ease the supply constraints," said Pratibha Thaker, the Economist Intelligence Unit's editorial director for the Middle East and Africa.