London: Brent crude oil steadied close to $106 (Dh389.3) a barrel on Tuesday, consolidating after losing more than $2 in the previous session as investors bet the Ukraine crisis would not interrupt Russian oil supplies.

The North Sea crude oil benchmark was up 15 cents at $106.39 per barrel by 12.15 GMT (2.15pm UAE time), after dropping $2.33 on Monday.

The May Brent contract hit $106.16 a barrel on Monday, the lowest level for a front month since February 6. US crude climbed 20 cents to $98.28, after dropping 81 cents in the previous session.

“The market no longer believes the Crimean situation is an issue,” said Carsten Fritsch, Commerzbank senior oil and commodities analyst in Frankfurt. “The crisis should ease.”

Russian President Vladimir Putin, defying protests by Ukraine and Western sanctions, told parliament on Tuesday that Russia would move forward with procedures to annex Ukraine’s Crimean region.

In a fiercely patriotic speech, Putin described Crimea as an inseparable part of Russia and accused the West of reverting to the Cold War by trying to stop the Ukrainian region joining Russia. He later signed a treaty making the Ukrainian Black Sea peninsula part of Russia.

By pressing ahead with steps to dismember Ukraine against its will, Putin has raised the stakes in the most serious East-West crisis since the end of the Cold War, a confrontation that markets worry could affect Russian energy exports to Europe.

Russian exports

Europe bought 4.33 million barrels per day (bpd) of Russian oil last year, or 44 per cent of OECD Europe’s net oil imports, according to the International Energy Agency.

But the United States and Europe have shown no signs yet of wanting to raise the stakes in their confrontation with Russia, and sanctions imposed on Monday targeted Russian and Crimea individuals, not broad trade.

Oil market attention has turned instead to ample global supplies and worries about a weakening demand outlook. Oil prices have also been dampened by estimates that US commercial crude inventories rose last week by more than 2 million barrels.

US crude inventories are expected to have risen by 2.8 million barrels on average, according to a preliminary Reuters poll taken ahead of weekly data reports set to be released on Tuesday and Wednesday.

With one eye on the Ukraine crisis, the European Union has begun discussing the need to reduce its reliance on Russian energy, British Foreign Secretary William Hague said on Monday.

Hague also said more names could be added to the sanctions list of 21 Russians and Ukrainians imposed by the EU, depending in part on how Russia reacted to Crimea’s application to join Russia following a weekend referendum.

Oil prices found some support from worries about oil supply from the Middle East and North Africa.

Libya is producing around 230,000 bpd after a protest shut down the 340,000 bpd Al Sharara oilfield, state-owned National Oil Corp. said on Tuesday.

“Supply issues should continue to support prices,” Fritsch at Commerzbank said. “If geopolitical risks were to disappear, prices could go lower, perhaps to around $100 per barrel. But as long as there are still outages and supply disruptions, [this] looks a good level for Brent for the moment.”