Oil jumps over 3% as Ukraine peace talks stall and reports say the EU is considering a ban on Russian energy exports

Oil rose as much as 3.6% on Monday as the peace talks between Russia and Ukraine continued to stall, while the European Union is considering a ban on Russian energy exports.

West Texas Intermediate gained 3.8% to trade around $108.62 a barrel by late morning in Europe.

There was little progress in the talks between Russia and Ukraine over the weekend. Russia called for the city of Mariupol to be surrendered by the Ukrainians, but the deputy prime minister shut down the request.

Vereshchuk was quoted as saying by the Ukrainian newspaper Ukrainska Pravda that there can't be a question of surrender.

According to analysts at Commerzbank, the change in tone around the peace talks has had an adverse effect on oil prices.

The news from Russia and Ukraine with respect to the peace talks no longer sounded nearly as optimistic as it did before, which has doubtless prompted the market to reexamine the situation.

The EU could potentially ban Russian oil exports, following in the footsteps of the US as President Biden prepares for a summit, according to media reports. Russia is the third-largest oil producer and supplies almost half the EU's natural gas. Natural gas flows have continued unaffected by the boycott of Russian crude-oil cargoes by Commodities traders.

Oil prices are on the up again, however, on reports that the EU was considering an embargo on Russian oil exports, ahead of a summit meeting this week which will be attended by President Biden, according to analysts at IG.

Millions of people are locked up in China because of a growing number of Covid cases. Analysts at ING think that the growing number of cases is playing a role in the oil markets price movements.

The market is struggling to balance the impact of self-sanctioning of Russian oil and the potential demand hit we are seeing in China due to the latest Covid outbreak.

Commerzbank noted that last week's IEA report on the oil shortage that could result from the ongoing crisis could have a significant impact.

The International Energy Agency predicts that the market will be missing 3 million barrels of crude oil and oil products per day from Russia from April.