Oil prices rose on Wednesday as sanctions on Russian banks following Moscow's invasion of Ukraine hampered trade finance for crude shipments and some traders opted to avoid Russian supplies in an already tight market.

Brent crude futures climbed $3.55, or 3.4%, to $108.52 a barrel at 0135 GMT, scaling highs not seen since July 2014.

U.S. West Texas Intermediate (WTI) crude futures were up $3.75, or 3.6%, to $107.16, after peaking at $107.55 in early trade, the highest since July 28, 2014.

"Trade disruptions are starting to get people's attention," said Westpac economist Justin Smirk.

"Issues around trade finance and insurance - that's all impacting exports from the Black Sea. The supply shocks are unfolding," he said.

Russian oil exports account for around 8% of global supply.

At the same time, while Western powers have not imposed sanctions on energy exports directly, U.S. traders at hubs in New York and the U.S. Gulf are shunning Russian crude.

"People are not touching Russian barrels. You may see some on the water right now, but they were bought prior to the invasion. There won't be much after that," one New York Harbor trader told Reuters.

A coordinated release of 60 million barrels of oil by International Energy Agency member countries agreed on Tuesday put a lid on market gains, but analysts said that would only provide temporary relief on the supply front.

"They helped to cap the rise, but if you want to turn prices around, you need something more sustainable," Smirk said.

Commercial oil stockpiles are at their lowest since 2014, the IEA said.

Against that backdrop, the Organization of the Petroleum Exporting Countries, Russia and allies, together known as OPEC+, are due to meet on Wednesday, where they are expected to stick to plans to add 400,000 barrels per day of supply each month.

Underscoring tightness in the market, the latest data from the American Petroleum Institute industry group showed U.S. crude inventories fell by 6.1 million barrels for the week ended Feb. 25.

The U.S. Energy Information Administration is due to release weekly data on Wednesday, with analysts polled by Reuters expecting a crude inventory build of 2.7 million barrels.

Reuters