New York [US]: Oil prices jumped on Monday as reports that the European Union (EU) is considering a ban on Russian energy stoked fears about crude supply.

The West Texas Intermediate (WTI) for April delivery added 7.42 U. dollars, or 7.1 per cent, to settle at 112.12 dollars a barrel on the New York Mercantile Exchange. Brent crude for May delivery increased 7.69 dollars, or 7.1 per cent, to close at 115.62 dollars a barrel on the London ICE Futures Exchange.

“The reason for the upswing is news that the EU appears to be considering a ban on oil imports from Russia,” Carsten Fritsch, energy analyst at Commerzbank Research, said Monday in a note.

The EU is highly dependent on Russian oil, “covering almost 30 per cent of its import needs with crude oil from Russia,” he said, adding “in the case of diesel, Russian oil even accounts for as much as 80 per cent of its net imports.”

“This means that large quantities would have to be obtained elsewhere, which would further tighten the market,” said Fritsch.

In its monthly report released on Wednesday, the International Energy Agency (IEA) said “the prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock.”

The Paris-based energy watchdog estimated that three million barrels per day of Russian oil output could be shut in from April “as sanctions take hold and buyers shun exports.”

For the week ending Friday, the WTI and Brent both declined 4.2 per cent, based on the front-month contracts.