The global oil price rose above $120 a barrel after European Union leaders agreed to a partial ban on Russian oil imports and China started lifting Covid-19 restrictions.
West Texas Intermediate, the U.S. benchmark, climbed 3.59% to $119.20 a barrel. Brent crude, the international benchmark, rose 3.75% to $119.89 a barrel, the highest levels since March.
Soaring energy prices this year are stoking the fastest inflation in decades, undermining consumer spending and economic growth while also prompting central banks to tighten policy. The European Central Bank gives its next interest-rate decision next week.
EU leaders agreed on Monday to cut most oil imports from Russia by the end of 2022 as part of new sanctions on Moscow in the wake of its invasion of Ukraine. The ban will cover Russian oil brought by sea, allowing a temporary exemption for oil delivered from Russia by pipeline.
EU Council President Charles Michel said in a tweet on Monday that the agreement covers more than two-thirds of oil imports from Russia, "cutting a huge source of financing for its war machine."
Commission president Ursula Von der Leyen said in a tweet that the embargo will "effectively cut around 90% of oil imports from Russia to the EU by the end of the year."
Demand from China is expected to pick up after Shanghai announced the easing of Covid-19 restrictions, reopening the country's largest city after a two-month lockdown.