By Geoffrey Smith

Investing.com -- A major fire broke out at fuel storage tanks next to Russia's most important oil export pipeline, the Ministry of Emergency Situations said in the small hours of Monday morning.

The fire, visible from miles away according to unverified social media footage, also hit diesel storage tanks in Bryansk, western Russia, the news agency Interfax reported an unnamed source as saying. The BBC's Steve Rosenberg said via Twitter that local television in Bryansk had also reported diesel tanks on fire, adding that they were a military facility.

The Emergency Ministry didn't say what had caused the fire. Bryansk is 170 kilometers, or just over 100 miles, from the Ukrainian border, and the incident is the latest in a series of unexplained accidents that are indicative of Ukrainian military strikes. Earlier this month, Ukrainian helicopters attacked a fuel depot in Belgorod, another important supply point for Russian troops in Ukraine, while last week, an important rail bridge linking Russia and eastern Ukraine was severely damaged.

There was no immediate statement from pipeline operator Transneft as to whether crude flows through the main Druzhba pipeline were affected. The Soviet-era Druzhba carries some 20% of Russian oil exports to Europe directly to refineries across Germany and central Europe.

The news had no immediate impact on crude prices, which tumbled in line with most risk assets in early trading on Monday due to concerns about the spread of COVID-19 in China. Chinese authorities locked down several districts of Beijing and ordered mass testing at the weekend, stoking fears that the country's capital could face an extended lockdown similar to Shanghai's.

Separately, over the weekend, The Times of London reported EU Commission Valdis Dombrovskis as saying that the EU is preparing a new round of sanctions that would also extend, at least partly, to Russian oil. Newswires quoted the EU's top diplomat Josep Borrell as saying that no formal proposal has been readied yet.

By 3:05 AM ET (0705 GMT), U.S. crude futures were down 4.0% at $98.00 a barrel, while Brent futures were down 3.8% at $102.16 a barrel.

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