Oil pulls back on view western sanctions on Russia won't choke supply

Oil prices took a breather after surging to seven-year highs as it became clear that US and European sanctions on Russia for sending troops into eastern Ukraine would not disrupt oil supply.

Oil prices took a breather on Wednesday after surging to seven-year highs in the previous session as it became clear the first wave of US and European sanctions on Russia for sending troops into eastern Ukraine would not disrupt oil supply.

At the same time, the potential return of more Iranian crude to the market, with Tehran and world powers close to reviving a nuclear agreement, also kept a lid on prices, which hit seven-year highs in the previous session.

Brent crude fell 13 cents, or 0.1%, to $96.71 a barrel at 0142 GMT, after soaring as high as $99.50 on Tuesday, the highest since Sept. 2014.

US West Texas Intermediate (WTI) crude futures fell 6 cents, or 0.1%, to $91.85 a barrel, after hitting $96 on Tuesday.

Prices jumped on Tuesday on worries that western sanctions on Russia for sending troops into two breakaway regions in eastern Ukraine could hit energy supplies, but the United States made it clear there would be no impact on energy exports.

ALSO READ: Vladimir Putin recognises independence of rebel Ukrainian territories, EU calls it 'blatant violation' | Top points

"The sanctions that are being imposed today as well that could be imposed in the near future are not targeting and will not target oil and gas flows," a senior US State Department official told reporters late on Tuesday.