The jump in commodity prices followed a weekend statement by Secretary of State

Antony Blinken

that the U.S. and European partners were discussing a potential ban on Russian oil imports. If imposed, an embargo would mark a significant change in the West’s response to Moscow’s war on Ukraine. Washington and allies have levied punishing sanctions on Russia’s financial system and elite, but they have so far skirted energy exports for fear of voter pushback over gasoline and heating bills.

A ban faces a diplomatic obstacle in Europe, which depends on Russian oil to a much greater extent than the U.S. Prices came off their highs Monday after Chancellor

Olaf Scholz

said Germany, the region’s biggest economy, would continue to buy natural gas, oil and coal from Russia.

Nonetheless, public discussion of an embargo signals newfound willingness among Washington policy makers to absorb higher energy costs.

“The political calculation is that any dislocation…is a better outcome than handing that money straight to Moscow,” said

Paul Horsnell,

head of commodities research at

Standard Chartered.

Oil traders braced for immediate disruption in energy markets if Western companies are ordered to eschew oil from Russia—the world’s third-biggest producer after the U.S. and Saudi Arabia—and find alternative supplies.

Futures on Brent crude, the international benchmark, settled 4.3% higher Monday, at $123.21 a barrel, after hitting $139.13 a barrel in early trading—their highest level since a boom in China’s economy lifted commodity markets in 2008. U.S. marker West Texas Intermediate ended 3.2% higher at $119.40 a barrel.

Before the war, Russian exports of crude and refined products met about 7.5% of the world’s oil demand. But after President

Vladimir Putin

invaded Ukraine in late February, many refiners paused imports. They struggled to find funding and tankers for cargoes of Russian oil, and feared reputational damage as well as sanctions on the crude down the line.

About 8% of U.S. imports of crude and refined products came from Russia last year. If a ban were imposed, refiners will struggle to find alternative supplies of vacuum gas oil and fuel oil, which U.S. refiners process into gasoline.

The challenge in Europe and the U.S. could be addressed by reshuffling flows of oil around the world: Europe would buy more crude from the North Sea, West Africa and the Middle East to replace lost barrels. Still, there is little slack in the oil markets, and shifting demand from one place to another isn’t simple, said

Amrita Sen,

founding partner at consulting firm Energy Aspects.

Supplies of oil were tight before war broke out, as demand recovered from pandemic lows. In December, commercial oil stockpiles in the Organization for Economic Cooperation and Development stood at 2.68 billion barrels, according to the International Energy Agency, their lowest level in seven years.

The U.S. government and its allies are releasing crude from strategic reserves to tame prices. They are also looking to adversaries for alternatives to Russian oil. The Biden administration is seeking to ease oil sanctions on Venezuela, The Wall Street Journal reported Sunday. Talks on reviving the Iran nuclear deal, meanwhile, have closed in on an agreement that could unlock Iranian oil for export.

Up to 800,000 barrels a day of Russia’s flagship Urals crude has continued to flow to Europe through the Druzhba pipeline. The Soviet-era conduit carries crude to refiners in Germany—Europe’s biggest economy—as well as to Poland, Slovakia, Hungary and the Czech Republic. Those countries would face the biggest difficulties in the event of a ban, analysts said.

“If there’s an oil sanction, Druzhba won’t flow and it’s just not going to be possible to replace those pipes,” said Ms. Sen.

Central European refiners on the southern leg of the Druzhba pipeline, such as those run by Hungary’s

Mol Group,

could import oil from the Adria pipeline. That pipe starts on the Croatian coast and has been renovated in recent years to bolster the region’s energy security. Urals is moderately heavy and sulfurous, meaning it can be replaced by crudes such as Arab Medium, produced in Saudi Arabia, and most crudes produced in Iraq.

Refiners in China and India might be in position to snap up some Russian oil at bargain prices, though there is a limit to how much Russian oil Asia can buy. Shipments from Russian ports to India are logistically difficult, and refiners in the region aren’t geared up to run on Urals.

China has never imported more than 500,000 barrels of Urals a day, according to Ms. Sen. If it were to buy all the Russian crude that headed to Europe before the war, China would have to take on an extra 2.7 million barrels a day—an unrealistic prospect. Indian refiners, meanwhile, are requesting that Russian and Kazakh oil be sold on a delivered basis, illustrating the difficulty they face in finding finance, insurance and tankers for the cargoes.

Complicating the picture are the handful of Russian refiners that have closed in recent days as they ran out of storage, traders said. Russia’s Sokol crude was offered at an unusual discount of $14 a barrel to benchmark Brent on Monday, they said, highlighting Russia’s difficulties in selling its oil.

Whether oil prices, already up 58% in 2022, remain at these elevated prices or rise even further depends largely on the response of the Saudi Arabia-led Organization of the Petroleum Exporting Countries. The cartel teamed up with Russia to backstop oil markets in 2017, and again when crude prices tanked in 2020, after a short-lived price war between Moscow and Riyadh.

The combined group, known as OPEC+, proceeded last week with plans to raise production incrementally, batting off calls from the U.S. to boost output quickly to tame prices. Analysts said that stance could shift if Saudi Arabia and the United Arab Emirates, which have the capacity to pump more oil, fear $130-a-barrel oil will dent demand.

“If OPEC wishes to stabilize markets, it can’t do it with Russia,” said Mr. Horsnell. “Russia is the cause of the interruption. Russia is the problem.”

Write to Joe Wallace at Joe.Wallace@wsj.com