Demand for oil has outpaced production growth as economies slowly rebound from the worst of the pandemic, leaving the market with a small buffer to mitigate an oil-supply shock. Russia is the world’s third-largest oil producer, and if a conflict in Ukraine leads to a substantial decrease in the flow of Russian barrels to market, it would be perilous for the tight balance between supply and demand.

Those dynamics have led traders in recent days to price in a sizable geopolitical risk premium, according to analysts. Crude oil prices, which haven’t topped $100 a barrel since 2014, jumped to an eight-year high on Ukraine concerns Friday…

“We are setting up for a period of turbulence,” said Jason Bordoff, founding director of Columbia University’s Center for Global Energy Policy. “The threat is more pronounced when energy markets are tight.”