Ukraine Russia Army
A Russian soldier directs a T-72B Russian tank as Russia conducts military drills on the shared Ukrainian border following Ukraine's 'anti-terror' operation.Reuters

Tension over the Ukraine crisis and anticipation that the West is readying sanctions against Moscow are pushing oil prices higher.

Benchmark Brent crude held at more than $110 a barrel while June US crude futures has now risen to $101.32 a barrel, reflecting the potential implications of Western sanctions on energy markets.

The United States and the European Union could impose sanctions on Russia as soon as Monday and markets are bracing themselves for retaliatory measures from Moscow that could impact global energy markets.

The EU relies on Russia for around a third of its gas needs while 40% of that comes via pipelines through Ukraine. Moreover, far more European companies are exposed to the Russian market than their American counterparts.

Washington and Brussels first imposed sanctions on Moscow in the wake of the disputed referendum that saw Russia annexe Crimea in March. Those measures were aimed at individuals with close ties to Russian President Vladimir Putin and a bank.

The White House has suggested that the new sanctions could target companies and individuals in Putin's "inner circle" while restrictions on high-tech defence exports could also be affected.

The sanctions are being readied as Western leaders believe that Russia has not abided by an agreement reached in Geneva to de-escalate the crisis in Ukraine's east, where armed pro-Russian militias have seized and occupied government buildings.

Under the Geneva deal, all sides were to hand in their weapons and leave public buildings. However, Washington and Brussels believe that Russia has not stuck to the deal, as the militias remain armed and have refused to leave government buildings.