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Oil prices approached $100 a barrel Tuesday, the highest in more than seven years, and European gas futures briefly jumped more than 13%, amid rising concerns over armed conflict in Ukraine.

The price of Brent crude, the international benchmark, neared the $100-a-barrel mark Tuesday before easing off to about $97 a barrel, a 2% increase. West Texas Intermediate was trading at nearly $94 a barrel, up about 3%.

The increase in oil prices will likely drive up gasoline and home heating prices, already at nearly eight-year highs, still higher in coming weeks.

An invasion could interrupt Russian natural gas and oil shipments to parts of Europe and then be followed by a decline in purchases of Russian energy by the West. In recent months, Russian gas flows to Europe have dropped sharply, with much of the shortfall made up by liquefied natural gas shipments from the United States and elsewhere.

A key issue is how far the West would go in imposing sanctions that might crimp Russia's oil and gas business. Sanctions could create difficulties for Western oil companies with interests in Russia. Shell, Europe's largest oil company, has a stake in a liquefied natural gas project on Sakhalin Island off eastern Russia. Exxon Mobil is a partner in an oil facility in the same area. TotalEnergies, a French giant, participates in a liquefied natural gas operation in the Russian Arctic. BP has a nearly 20% share in Rosneft, Russia's national oil company.

"Some of the financial sanctions under consideration in Washington could make it challenging for" such companies to continue operating in Russia, according to Helima Croft, an analyst at RBC Capital Markets.

Ahead of the latest jump in oil prices, Chattanooga motorists were already having to pay more at the pump with retail gas prices at their highest level in nearly eight years. Chattanooga gas prices rose another nickel a gallon in the past week to an average of $3.31 a gallon Monday, according to GasBuddy's daily survey of 170 stations in Chattanooga.

Gas prices in Chattanooga are up 37 cents per gallon from a month ago and are $1.04 a gallon above where they were a year ago. But local gas prices remain an average of 20 cents a gallon below the U.S. average.

The average price of regular gas in Chattanooga is more than twice the depressed level for this date reached in 2016 but remains below the peak $3.62 a gallon average price reached Feb. 21 in 2013, according to GasBuddy.com records.

"Gasoline prices kept moving higher, tugged by the rising price of oil as the market concentrates on possible outcomes from the situation that could affect global oil production amidst recovering demand," Patrick De Haan, head of petroleum analysis for GasBuddy, said in a release. "We're also just a few weeks away from the traditional start of the spring surge in gasoline prices, brought on by the change to summer gasoline, seasonal maintenance at refineries and rising demand. The weeks ahead could be rather ugly with rising prices, especially if Russia pursues a strong-arm invasion of Ukraine."

Higher fuel prices also are pushing up the cost of electricity for home heating.

EPB said electricity prices in March will be up another 0.6% from the current rate and will be 4.8% above a year ago. For the typical household using 1,295 kilowatt hours of electricity in a month, the higher rates will mean households will pay an average $5.96 more next month than what they paid for the same amount of power in March 2021.

The Tennessee Valley Authority adjusts the price of electricity each month based on the changing price of the fuel used to generate that power.

"The overall system average fuel rate for March is marginally higher than the February rates but in line with the prior month's forecast," TVA spokesperson Scott Brooks said in a statement about the March fuel cost adjustment. "The March fuel rate level is 22.9% higher than the three-year average. The higher fuel rate is mostly due to higher commodity prices, relative to the comparative three-year time frame, [which includes COVID-19 impacts]. In particular, gas and coal rates remain higher than the three-year average rates and volatility, especially in natural gas pricing, remains prevalent."

In its quarterly financial report for the three months ended Dec. 31, TVA said the price of natural gas late last year was up 92% from the previous year. The jump in natural gas prices, combined with higher prices for coal, boosted TVA's costs of fuel and purchased power by $260 million in the final three months of 2021 compared with the depressed levels a year earlier during the pandemic slowdown.

TVA expects winter heating bills this year for electric-heated homes to average $5 to $15 more than last year for the typical homeowner, but such increases are well below the projected 30% increase forecast by the Energy Information Administration for homes heated with natural gas. About 40% of TVA's power is derived from the burning of fossil fuels affected by the recent jump in fuel prices.

— Compiled by Dave Flessner

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