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UPDATE 5-Brent rises towards $109 on renewed Ukraine tensions

* Pro-Russia rebels call victory in East Ukraine vote

* Top exporter Saudi Arabia would supply more oil if needed

* EU expands sanctions over Ukraine crisis

(Updates throughout)

LONDON, May 12 (Reuters) - Brent crude oil climbed towards $109 per barrel on Monday as the deepening crisis between Russia and Ukraine unsettled investors.

Though the likelihood is remote that the turmoil could lead to an energy supply disruption, Saudi Oil Minister Ali al-Naimi said the world's top oil exporter was willing to supply more crude in the event of a shortage.

Pro-Moscow rebels claimed a resounding victory in Sunday's referendum in eastern Ukraine, with some saying that meant independence and others eventual union with Russia, as clashes broke out between separatists and troops.

Brent crude was up 69 cents at $108.58 by 1251 GMT, while U.S. crude gained 43 cents to $100.42.

The European Union, which called Sunday's polling illegal, expanded the sanctions it placed on Russia after Moscow annexed Ukraine's Crimea region following a similar vote in March.

But analysts say the tougher action was unlikely to affect supply.

"Although there are still no signs that there will be an interruption in oil supply from Russia due to the Ukrainian situation the market remains concerned each time a new event evolves from the Ukraine," said Dominick Chirichella of Energy Management Institute in New York.

Investors are also keeping an eye out for industrial production and retail sales data expected from China on Tuesday.

Negotiators from Iran and the International Atomic Energy Agency meet in Vienna on Monday, a day before talks resume between Tehran and six western nations over Iran's nuclear programme.

The two sets of talks are separate but closely linked as both focus on fears that Iran may be covertly seeking the capability to develop nuclear weapons.

Any sign of progress towards a final resolution to the West's dispute with Tehran would pressure oil prices in anticipation of a ramp-up in Iranian oil exports.

(Additional reporting by Keith Wallis in Singapore; editing by Jane Baird and Keiron Henderson)