Oil jumps 4% as EU proposes ban on Russian oil

Oil jumps 4% as EU proposes ban on Russian oil

LONDON - Oil prices jumped on Wednesday as the European Union, the world's largest trading bloc, spelled out plans to phase out imports of Russian oil, offsetting demand worries in top importer China.

Brent crude futures rose $3.99, or 3.8%, to $108.96 a barrel by 1121 GMT. West Texas Intermediate crude futures rose $4.05, or 4%, to $106.46 a barrel.

European Commission President Ursula von der Leyen on Wednesday proposed a phased oil embargo on Russia over its war in Ukraine, as well as sanctioning Russia's top bank, in a bid to deepen Moscow's isolation.

The Commission's measures include phasing out supplies of Russian crude within six months and refined products by end-2022, von der Leyen said. She also pledged to minimise the impact on European economies.

Hungary and Slovakia, however, will be able to continue buying Russian crude oil until the end of 2023 under existing contracts, an EU source told Reuters on Wednesday.

"Russian oil is now 'bad oil'," SEB chief commodities analyst Bjarne Schieldrop said.

"This energy war of 'good oil' versus 'bad oil' has just started," he added.

Investors are also waiting for an announcement from the U.S. Federal Reserve on Wednesday. It is expected to intensify efforts to bring down high inflation