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Ukraine-Russia crisis: Oil prices near $100 as Moscow sends troops to breakaway regions

Qatar's energy minister says that no country can replace Russian gas supply to Europe in the event of disruption due to a full-blown conflict
An employee working at the Bashneft-Novoil refinery in Ufa, Russia (Reuters/file)

Oil prices jumped to nearly $100 per barrel on Tuesday afternoon, as several western nations said they would impose economic sanctions on Russia following Moscow's recognition of two eastern regions in Ukraine as independent republics.

Russia, the second-largest exporter of crude oil after Saudi Arabia, said on Monday that it's sending troops into Donetsk and Luhansk territories to ensure "peacekeeping" in the Donbas region, east of Ukraine.

Moscow's decision had seen the Brent North Sea crude oil reach $99.50 per barrel, the highest level in seven years, and resulted in heavy falls in the Asian stock markets.

Victoria Scholar, head of investment at Interactive Investor, told Reuters that "the intensifying crisis between Russia and Ukraine has raised concerns about the supply disruptions that would ensue as sanctions look set to cripple Russia, the world's second largest oil exporter and the world's top natural gas producer."

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Ukrainian President Volodymyr Zelensky called for Russia to be punished with "immediate sanctions" that include "the complete stop of Nord Stream 2".

'No one can replace Russian gas'

On Tuesday, German Chancellor Olaf Scholz said that his country was suspending the Nord Stream 2 gas pipeline project with Russia as a response to Moscow's recognition of the breakaway regions.

Ukraine conflict: Could Qatar's gas bail out Europe?
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However, Qatar's energy minister Saad al-Kaabi told reporters at a gas conference in Doha that no country can replace Russian gas supplies to Europe with liquefied natural gas (LNG) in the event of disruption due to a conflict between Moscow and Kyiv. 

"Russia provides 30-40 percent of the [gas] supply to Europe. There is no single country that can replace that kind of volume, there isn't the capacity to do that from LNG," Kaabi said on Tuesday.

"Most of the LNG are tied to longterm contracts and destinations that are very clear, so to replace that sum of volume that quickly is almost impossible," he added.

The United States, Britain and the European Union also condemned Russia's move, and proposed sanctions against Moscow. 

"Our response will be in the form of sanctions, whose extent the ministers will decide," Josep Borrell, the EU foreign policy chief, said.

On Tuesday, Turkish President Recep Tayyip Erdogan said that Russia's move is "unacceptable" and called on all parties to respect international laws.

"We see this decision by Russia as unacceptable," Erdogan told reporters while on a flight in Africa. "We repeat our call for common sense and respect for international law by all sides."

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