Shortfalls in OPEC+ production and spare capacity concerns are likely to keep the oil market tight and prices could hit $125 per barrel as early as the second quarter of this year, JP Morgan Global Equity Research said.

"Supply undershoot set to rise through 2022 as OPEC+ unlikely to deviate from targeted quota increases - driving a higher risk premium of more than $30 per barrel to oil prices," the bank said in a note dated Feb. 11.

Brent crude on Monday was trading around $94.55 a barrel while US West Texas Intermediate (WTI) crude was at $93.19 a barrel around 1107 GMT amid escalating Ukraine-Russia tensions.

Oil prices jump more than 1% to 7-year highs on supply jitters

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, has raised its monthly output target by 400,000 barrels per day recently but has repeatedly failed to achieve those increases.

Some participating countries are struggling to ramp up output following years of under-investment.

The International Energy Agency in its last monthly report said the gap between the OPEC+ target and actual output in January had widened to 900,000 bpd.

"This underperformance comes at a critical juncture - and in our view, as other global producers falter, the combination of underinvestment within OPEC+ nations and post-pandemic rising oil demand will dovetail to a potential point of energy crisis," JP Morgan said.

"In addition, we note a muted supply response by non-OPEC producers to higher prices (led by a greater focus on transition/cash return) could add a further $10/bbl premium," the analysts added.