Oil prices rose more than 1 percent on Tuesday, with WTI crude approaching $119 a barrel and Brent crude trading around $123 a barrel after EU leaders reached an agreement to ban 90 percent of Russian crude by the end of 2022, fueling concerns of an even tighter global market.
Also, demand is expected to rise shortly after China eases coronavirus curbs.
Considering the May month, oil is up nearly 15 percent, a sixth straight month of gains. The recent price of the commodity represents its highest since March 9.
The EU ban resolves a deadlock with Hungary over the bloc’s toughest sanction yet on Moscow and would clear the way for other elements of a sixth package, including cutting Russia’s biggest bank from the SWIFT messaging system.
However, some analysts suggest that oil price gains may be muted as the move has already been priced in by the markets.
Meanwhile, demand from China is expected to pick up after the cities of Beijing and Shanghai eased Covid restrictions, with some reservations about the effect of skyrocketing petrol prices on global consumption.
On the production side, OPEC+ is set to stick to its policy of modest output increases at its meeting on Thursday, rejecting western calls for faster production to lower prices.