An armored personnel carrier is seen during tactical exercises, conducted by the Ukrainian National Guard, in the abandoned city of Pripyat near the Chernobyl Nuclear Power Plant in Ukraine on February 4, 2022.
Gleb Garanich | Reuters

Oil will “certainly” hit $120 a barrel and the global economy will be “radically altered” if Russia invades Ukraine, veteran strategist David Roche has predicted.

Moscow has denied that it plans to invade neighboring Ukraine, but has moved around 130,000 soldiers, tanks, missiles, and even fresh blood supplies to the border. The Kremlin is demanding that Ukraine never be permitted to become a member of the NATO military alliance, and has also said it wants the organization to roll back its presence in Eastern Europe.

Speaking to CNBC’s “Squawk Box Europe” on Monday, Roche referred to uncertainty over Russia’s next steps as “the ghost in the room” — one with the potential to massively disrupt global markets.

“I think if there was an invasion of Ukraine and there were to be sanctions which impeded either Russia’s access to foreign exchange mechanisms, messaging systems and so on, or which prevented them from exporting their commodities, either oil or gas or coal, I think at that point in time you would most certainly see oil prices at $120 [a barrel],” he said.

Brent crude oil contracts for April delivery were trading slightly lower at around $90.50 per barrel on Wednesday, but oil prices have seen steady gains since the beginning of the year, when they were trading below $80 a barrel.

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On Sunday, White House national security advisor Jake Sullivan warned that an invasion could come “any day now.”

Even discounting the potential impact on oil prices, Roche predicted that a Russian invasion of Ukraine would have far reaching economic consequences. He warned that many market participants were underestimating the potential ramifications of the Russia-Ukraine crisis.

“My best guess is most investors are treating Mr. Putin as background music, which I’m sure Mr. Putin would not agree with,” he told CNBC.

Roche argued that if Putin does do “something dramatic about Ukraine,” the U.S. and its allies were likely to impose harsh sanctions on Russia, and European equity markets and the outlook for the global economy would be “radically altered.”

U.S. lawmakers have said they are devising the “mother of all sanctions” against Russia as a method of defending Ukraine that would be “crippling to [the Russian] economy.” British and German ministers have also warned there will be economic consequences for Moscow if it takes any aggressive action against Ukraine.

However, experts have suggested Russia is willing to incur “real financial harm” and all-out war to achieve its political objectives in Ukraine.

In a poll of 5,529 people across seven EU member states at the end of January, the European Council on Foreign Relations found that the majority of people in all surveyed countries believed Russia will invade Ukraine. The majority of participants also said they believed NATO and the EU should come to Ukraine’s defense if Russia invades.