Oil Climbs on Supply Jitters as EU Lays Out Russian Oil Ban

Oil Climbs on Supply Jitters as EU Lays Out Russian Oil Ban

Oil prices extended gains on Thursday on supply concerns after the European Union laid out plans for new sanctions against Russia, including an embargo on crude in six months, offsetting concerns over weaker Chinese demand.

Brent was up 36 cents, or 0.3%, at $110.50 a barrel by 0825 GMT, and US West Texas Intermediate crude rose 11 cents, or 0.1%, to $107.92 a barrel.

Both benchmarks gained more than $5 a barrel on Wednesday.

The sanctions proposal, which needs unanimous backing by the 27 EU countries, also includes phasing out imports of Russian refined products by the end of 2022, and a ban on all shipping and insurance services for the transportation of Russian oil.

"The oil market has not fully priced in the potential of an EU oil embargo, so higher crude prices are to be expected in the summer months if it's voted into law," Reuters quoted Rystad Energy’s headof oil markets research, Bjørnar Tonhaugen, as saying.

The French environment and energy minister, Barbara Pompili, said she was confident European Union member states will reach a consensus on sanctions by the end of this week.

"The planned EU oil embargo represents a massive logistical challenge for oil markets," said Investec’s head of commodities, Callum