Renewed anxieties about global supply shortages are pushing oil prices higher again, the latest sharp moves in three weeks of extraordinary market volatility since Vladimir Putin ordered Russian tanks into Ukraine.

The international oil benchmark Brent crude settled at $107.93 a barrel on Friday, up more than 9 per cent for the preceding two sessions. The price was well below a $139 peak reached on March 7but still about $10 a barrel more than before the Russian invasion.

Calculating the supply effect of punitive sanctions on Russia, the world’s largest exporter of crude and petroleum products, has been complicated by hopes for peace talks between Moscow and Kyiv and the possibility of eased restrictions on the oil exporters Venezuela and Iran. Lockdowns to contain a new surge of Covid-19 in China, the world’s largest petroleum importer, will diminish some consumption.

“Oil price volatility goes hand in hand with wars involving big oil producers,” said Bill Farren-Price, a director at Enverus, an energy consultancy.

“Supply risk is one thing, but doubts about demand pull the other way. The next big waymarkers will be Europe’s approach to Russian energy sanctions and the Iran nuclear talks, which could prompt a flood of Iranian oil. It’s a giant oily price see- saw.”

Oil prices leapt after the International Energy Agency said on Thursday that Russian crude production could fall by as much as 3mn barrels a day from April, or 3 per cent of the world’s total. The agency, a watchdog for western nations, warned the world could be on the cusp of “the biggest [oil] supply crisis in decades”.

But price gains will be limited until traders can quantify the extent of Russian supply losses, said other analysts.

Russia’s oil production had actually risen so far in March, said Florian Thaler, chief executive of OilX, which tracks global petroleum flows. Sales of refined products had begun to dip, but crude oil exports remained robust, he said.

EU countries and others including China continue to buy Russia’s oil, despite the US ban. Thaler said Indiawhich normally imports about 150,000 b/d of Russian crude, could increase that to more than 500,000 b/d in April.

Russian crude exports were now selling at prices well below Brent to attract buyers, said analysts at Morgan Stanley, “and history suggests that when sufficiently discounted, crude tends to find a market”.

Any loss of Russian output would squeeze a fragile market in which global oil supplies were already failing to keep pace with surging post-pandemic demand, said analysts.

On Thursday, Morgan Stanley raised its Brent price forecast for the third quarter by $20 a barrel to $120 a barrel. Goldman Sachs has raised its forecast to $135 a barrel for the year, but said Brent could reach as high as $175.

Commercial oil stocks in rich countries were rapidly declining as supplies fall short of demand, the IEA said this week. Western countries have also released oil from emergency reserves in a bid to cool oil prices that remain more than twice as high as their long-term historical average.

Some analysts have said that a price jump caused by an emerging supply shock could destroy oil demand, eventually driving down prices.

The Ukraine crisis alone could “appreciably depress global economic growth”, the IEA said. It cut its forecast by about a third for how much more crude the world would use in 2022.

Thaler at OilX pointed to China, where he said imports and demand from refineries were now trending much lower than in 2021.

By contrast, consumption in the US, the world’s biggest petroleum market, has remained close to historic highs above 20mn b/d in recent weeks despite record domestic petrol prices.

Twice weekly newsletter

Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here.