SULAIMANI (ESTA) — Oil prices extended gains on Thursday on supply concerns as the EU proposal laid out plans for new sanctions against Russia, including an embargo on crude in six months, offsetting concerns over weaker Chinese demand.
Brent crude futures had climbed 38 cents to $110.5 a barrel by 0638 GMT, while U.S. West Texas Intermediate crude futures rose 21 cents to $108 a barrel.
Both benchmarks jumped more than $1 a barrel earlier in the volatile session after gaining more than $5 a barrel on Wednesday, according to Reuters.
The sanctions proposal, which was announced by European Commission President Ursula von der Leyen and needs unanimous backing by the 27 EU countries to take effect, includes phasing out supplies of Russian crude in six months and refined products by the end of 2022, Reuters reported.
It also proposes to ban in a month’s time all shipping, brokerage, insurance and financing services offered by EU companies for the transportation of Russian oil.
“That’s a likely game changer for oil and refined product markets,” Reuters quotedCBA analyst Vivek Dhar as saying.
Dhar added that sanctions on insurance, previously used by the United States and European countries, were effective in limiting Iran’s oil exports.
