Oil jumped over 2.5% today after Russian President Vladimir Putin announced a partial military mobilisation, escalating the war in Ukraine and raising concerns of tighter oil and gas supply.
Brent crude futures rose $2.26, or 2.5%, to $92.88 a barrel, while US West Texas Intermediate crude was at $86.09 a barrel, up $2.15, or 2.6%.
Putin said he had signed a decree on partial mobilisation beginning today, saying he was defending Russian territories and that the West wanted to destroy the country.
"The partial mobilisation is definitely a bullish factor as it increases the risks of a prolonged war in Ukraine," said Viktor Katona, lead crude analyst at Kpler.
Oil soared and touched a multi-year high in March after the Ukraine war broke out.
European Union sanctions banning seaborne imports of Russian crude will come into force on December 5.
Signs of a recovery in Chinese demand, hit by Covid-19 shutdowns, also boosted prices.
At least three Chinese state oil refineries and a privately run mega refiner are considering increasing runs by up to 10% in October from September, eyeing stronger demand and a possible surge in fourth-quarter fuel exports.
This is according to people with knowledge of the matter.
Meanwhile, the US said that it did not expect a breakthrough on reviving the 2015 Iran nuclear deal at this week's UN General Assembly, reducing the prospects of a return of Iranian barrels to the international market.
The OPEC+ producer grouping - the Organization of the Petroleum Exporting Countries and associates including Russia - is now falling a record 3.58 million barrels per day short of its production targets, or about 3.5% of global demand.
The shortfall highlights the underlying tightness of supply in the market.
Investors this week have been bracing for another aggressive interest rate hike from the US Federal Reserve that they fear could lead to recession and plunging fuel demand.
The Fed is widely expected to hike rates by 75 basis points for the third time in a row later this evening in its drive to rein in inflation.
Meanwhile, US crude and fuel stocks rose by about 1 million barrels for the week ended September 16, according to market sources citing American Petroleum Institute figures yesterday.
US crude oil inventories were estimated to have risen last week by around 2.2 million barrels in the week to September 16, according to an extended Reuters poll.