By Sonali Paul and Mohi Narayan

NEW DELHI (Reuters) - Oil prices see-sawed on Tuesday with Brent crude futures trading at $125 per barrel, around 10% below a 14-year high struck in the last session, reflecting relief that European allies were not planning to join a possible U.S. ban on Russian oil imports.

Brent crude futures were up $2.01, or 1.63%, at $125 a barrel at 0440 GMT, after trading as high as $126.35.

U.S. West Texas Intermediate (WTI) crude futures were up $1.53, or 1.28%, at $120 a barrel.

"Unless the war stops, (Brent) prices can go anywhere towards $156 to $185 a barrel, said Ajay Kedia, director at Kedia Commodities in Mumbai.

However, keeping a lid on price gains, late on Monday officials said the United States was willing to move ahead with a ban alone, and Germany, the biggest buyer of Russian crude, rejected plans for an energy embargo.

A senior U.S. official, speaking on condition of anonymity, told Reuters no final decision had been made but "it is likely (to be) just the U.S. if it happens."

Russia exports around 7 million barrels per day of crude and oil products.

Russia warned it could stop the flow of gas through pipelines from Russia to Germany in response to Berlin's decision last month to halt the opening of the controversial new Nord Stream 2 pipeline.

"Markets though have already priced in a significant disruption to Russian oil exports already," Commonwealth Bank commodities analyst Vivek Dhar said in a note, pointing to how sanctions on Russian banks have already hit trade finance.

If all of Russia's oil exports were blocked from global markets, analysts have said prices could rocket to $200 a barrel, while Russia's deputy prime minister said oil could soar to more than $300.

"There is no capacity in the world in the moment that can replace 7 million barrels of exports," OPEC Secretary General Mohammad Barkindo told reporters at an industry conference in Houston.

Australia's two refiners, Viva Energy and Ampol Ltd, said they had stopped buying Russian crude following Moscow's invasion of Ukraine.

Oil supply disruptions come as inventories continue to fall worldwide. Five analysts polled by Reuters estimated on average that U.S. crude stockpiles decreased by about 800,000 barrels in the week to March 4.

The poll was conducted ahead of weekly inventory reports from the American Petroleum Institute, an industry group, on Tuesday and the U.S. Energy Information Administration on Wednesday.