The oil market could become even more volatile in the days ahead if Vladimir Putin decides to retaliate against Western sanctions using oil as a weapon.
"We don't know what an angry Vladimir Putin is going to do in terms of crude oil supply," Path Trading Partners Co-Founder and Chief Market Strategist Bob Iaccino told Yahoo Finance Live.
"With that kind of volatility, with the volatile leader that's involved in the main focus of these price hikes, it's disturbing in a lot of asset markets," he said.
This week, the U.S. announced a ban against Russian energy imports while the U.K. banned any incoming Russian crude in response to the ongoing Russian invasion of Ukraine. Western nations have also imposed other sanctions against Moscow in a move to isolate the country.
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The Western oil market has also placed a 'de fact ban' on Russian crude with refiners, vessel companies and financial firms shunning imports from Russia.
"Does Vladimir Putin now try a little retaliatory strike by keeping a discount on Russian crude to China but raising it everywhere else? Or possibly even cutting production or keeping production domestic within Russian borders and only going to Asia?" asked Iaccino.
"That could potentially push crude oil above $135 a barrel on a settlement basis," he added.
The strategist says research shows that an average gas price of over $4 a gallon begins to change consumer behavior domestically.
Certain areas of California are now seeing gasoline at around $6/gallon. Chicago's gasoline is sitting above $5.
"These are prices that affect consumers," said the strategist.
Ines is a stock market reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre
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