The new EU approval, if approved, would ban Russian coal and Russian ships from entering EU ports, with a ban on oil imports on the cards.
Oil futures rose on Wednesday, curtailing early losses, as the threat of new sanctions on Russia fueled supply concerns, a build-up in US crude stockpiles and weak demand after Shanghai’s extended lockdown countered fears .
Brent crude futures were up $1.14, or 1.1%, at $107.78 a barrel as of 1115 GMT. US West Texas Intermediate futures climbed $1.42, or 1.4%, to $103.38 a barrel
The United States and its allies on Wednesday prepared new sanctions on Moscow over civilian killings in northern Ukraine, which President Volodymyr Zelensky described as a “war crime”. Russia denies targeting civilians.
“With the escalation of allegations and new Western sanctions against Russia, further Russian economic retaliation looks inevitable,” said Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdowne.
“These concerns no doubt drive up oil prices, with volatility expected to continue as the geopolitical situation unfolds.”
The proposed EU sanctions, which the bloc’s 27 member states must ratify, would ban Russian coal purchases and prevent Russian ships from entering EU ports.
EU head of executive Ursula von der Leyen said the bloc was working on additional sanctions, including oil imports.
Britain also urged the G7 and NATO countries to agree on a timetable to phase out oil and gas imports from Russia.
The price falls on a stronger dollar before easing rising supply concerns, which would make oil more expensive for holders of other currencies, and a surprising build-up in US crude reserves. [API/S]
The dollar rose to its highest level in nearly two years on Wednesday after jumping overnight on more lewd comments from a Federal Reserve official.
Demand concerns also mounted after authorities in top oil importer China imposed a lockdown in Shanghai to cover all 26 million people in the financial hub.
Meanwhile, International Energy Agency (IEA) member states were still discussing how much oil they would release into cold markets from simultaneous storage, three sources told Reuters, with an announcement expected in the coming days.
(Reporting by Noah Browning and Yuka Obayashi Editing by Richard Pullin and Mark Potter)
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