The oil price has surged towards the $100 a barrel mark this morning after Russia ordered its troops into Ukraine.
The price of Brent crude reached a seven-year high of $97.44 a barrel as Vladimir Putin sent troops into two rebel-held regions in Ukraine's east after it recognised them as independent states.
Britain and several western allies have threatened sanctions on Russia. The country is the second largest oil exporter after Saudi Arabia and is also the world's top producer of natural gas.
Dark day
Cabinet minister Sajid Javid told Sky News: "We are waking up to a very dark day in Europe. It's clear from what we have already seen and found out today that Russia's President Putin has decided to attack the sovereignty of Ukraine and its territorial integrity."
The UK has always said this was "unacceptable", he says.
"We've seen that he's recognised these breakaway eastern regions in Ukraine and we can already tell he's sent in tanks and troops, so I think from that you can conclude that the invasion of Ukraine has begun," he added
Oil sanctions 'unlikely'
However, speaking to Reuters, Commonwealth Bank analyst Vivek Dhar said it was unlikely that America and European governments would impose oil or gas sanctions on Russia if it invaded Ukraine further, as that would inflict pain on themselves.
However, Russia itself could hold back oil and gas supplies if it sought to retaliate against any other sanctions imposed by the West, Dhar added.
Analysts say the big question hanging over the oil market is whether Russian energy exports would actually be disrupted if Moscow went ahead with a full-scale invasion of Ukraine and western governments imposed sanctions against Russian financial institutions.