Oil prices surged to seven-year highs on Wednesday as supply disruption fears mounted following hefty sanctions on Russian banks amid the intensifying Ukraine conflict, while traders rush to seek alternative oil sources in an already tight market.

Brent crude futures gained $5.30, or 5 percent, to $110.23 a barrel at 0419 GMT, a level last seen in July 2014.

U.S. West Texas Intermediate (WTI) crude futures were up $5.02, or 4.8 percent, to $108.41, after earlier hitting the highest since September 2013.

Oil prices first topped $105 on February 24, after Russia's attack on Ukraine exacerbated concerns about disruptions to global energy supply.

"Trade disruptions are starting to get people's attention," said Westpac economist Justin Smirk, according to a report by Reuters. 

"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 percent of global supply.

Exxon Mobil on Tuesday said it would exit Russia oil and gas operations because of the conflict. 

The United States said Tuesday it plans to release 30 million barrels of oil as part of a global 60 million barrel pledge in an effort to shore up energy markets.

(With input from Reuters)