The increase in world oil prices was supported by supply concerns as Russian gas flows to Europe fell and the European Union sought support for the Russian oil embargo.
Russian gas flows to Europe via Ukraine fell by a quarter after Kyiv suspended use of a key transit route, blaming interference by Russian occupying forces. This is the first time exports through Ukraine have been disrupted since the invasion.
Brent crude oil prices were up $5.63, or up 5.5 percent, to $108.09 a barrel as of 13:13 EDT.
Meanwhile, the price of US West Texas Intermediate crude oil rose USD 6.47 to USD 106.23.
“I suspect the gas disruption in Ukraine is having a growing impact,” said Jeffrey Halley, analyst at broker Oanda.
The European Union has proposed an embargo on Russia’s oil, which analysts say will further tighten markets and divert trade flows. A vote, which requires unanimous support, has been postponed as Hungary has struggled as an opposition.
“Prices will continue to move up especially if the European Union reaches an agreement to stop buying Russian oil above this year’s balance,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
U.S. crude stockpiles rose more than 8 million barrels in the past week, due to another major release from strategic reserves, the Energy Information Administration said.
Commercial crude inventories have grown as the White House has chosen to flood the market with oil to offset rising prices.