The price of crude oil dropped sharply Tuesday after Russian President Vladimir Putin said his country was not seeking to escalate the conflict in Ukraine

Benchmark U.S. crude for April delivery fell $1.59 to $103.33 a barrel on the New York Mercantile Exchange. On Monday, oil added $2.33 to close at $104.92. Brent crude, used to set prices for international varieties of crude, fell $1.90 to $109.30 a barrel on the ICE Futures exchange in London.

Putin said that the situation in Ukraine is "gradually stabilizing." Although he did say the Kremlin was ready to protect ethnic Russians in Ukraine, his comments cooled tensions that rose when Russian troops took control of all Ukrainian border posts on the strategic peninsula of Crimea. Also Tuesday, the U.S. announced a $1 billion aid package in energy subsidies to Ukraine.

Russia was the world's second-largest producer of oil in 2012, accounting for 12.6 percent of global supplies, according to the International Energy Agency. It was also the world's top exporter of natural gas that year, the IEA said. So, any economic sanctions against Moscow — one of the few tools available to the U.S. and Europe — could limit world supply and push up prices.

In other energy futures trading on Nymex:

— Wholesale gasoline lost 4 cents to $2.99 per gallon.

— Heating oil fell 4 cents to $3.04 per gallon.

— Natural gas jumped 18 cents to $4.67 per 1,000 cubic feet.