Oil jumped to a two-month high of more than $123 a barrel Tuesday after the European Union agreed to ban most Russian oil imports as part of its sixth round of sanctions.
The Chinese cities of Beijing and Shanghai loosened some of the strict coronaviruses restrictions, raising the prospect of a pick-up in demand for energy.
The global benchmark price for crude oil was $123.55 a barrel as of 4 a.m. It was the highest level since late March.
The US benchmark was 3.13% higher at $118.64 a barrel, its highest price since early March.
EU leaders reached a deal to ban the import of Russian oil and petroleum products by sea, which led to a jump in oil prices.
The plan would hit 75% of Russian oil imports by the end of the year, according to the president of the European Council.
There is a temporary carve-out for oil delivered from Russia to Europe. The exemption was granted to Hungary, Slovakia and the Czech Republic, which are dependent on the deliveries.
The final details, including how long the exemption will last, have to be worked out by officials from the 27 member states of the EU.
Jeffrey Halley, strategist at trading platform Oanda, said in a note that the announcement that a partial EU ban on Russian oil imports has made it over the finish line sent oil prices higher overnight.
Recovering data from China today and by default recovering energy consumption has seen the rally continue in Asia. The strength of a country's private sector is indicated by thePMI.
The head of research at MUFG said the jump in oil added to inflationary pressures.
He said that the price gain has been nearly 9% in the last four trading days.
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