New Delhi: Oil prices nearly touched $120 a barrel on Thursday as traders began avoiding Russian supplies, turning fears of a global supply disruption into reality.

Oil prices rose to $119.84 per barrel–the highest since 2012–on Thursday before giving up a few dollars per barrel. US crude stockpile’s decline to multi-year lows also aided the rise of oil, which has gained nearly $20 per barrel in a week since Russia sent its troops into Ukraine.

Domestic consumers have been shielded by the international price volatility since the beginning of November, when rates of petrol and diesel were last revised. The crude then traded around $80 per barrel.

State-run oil companies are currently selling petrol and diesel at a loss of Rs 7 and Rs 9 per litre, respectively. To calculate domestic prices of petrol and diesel, companies use a rolling 15-day average of the respective international fuel rates and the exchange rate. If international prices sustain at the current level, the sharp hikes of the last two-three days will have an even bigger impact on domestic prices in the coming days, increasing state companies’ losses on fuel sales. This would necessitate even sharper price hikes after the conclusion of state elections next week.