By Yuka Obayashi

TOKYO, Reuters – Monday’s oil prices rose as worries grew over tighter global supplies. The worsening situation in Ukraine has raised concerns about the possibility of Russia being subject to more severe sanctions.

The futures gained $1.50 or 1.3% to $113.20 a barrel at 0030 GMT. U.S. West Texas Intermediate futures rose 98cs or 0.9% at $107.93 a barrel.

On Thursday, the European Union announced that it might ban Russian oil imports. Both contracts advanced more than 2.5% ahead of Easter Weekend holidays.

EU nations claimed that last week, the bloc’s executive was writing proposals to ban Russian oil. However diplomats stated that Germany did not support an immediate embargo.

These comments were made before tensions escalated in Ukraine’s crisis. Over the weekend, Ukrainian soldiers resisted a Russian ultimatum that they would lay down arms in Mariupol on Sunday. Moscow calls the actions it took in Ukraine a “special operations”. It claimed that its forces had almost seized Kiev and provided no sign of a ceasefire.

According to the International Energy Agency, about 3,000,000 barrels per day (bpd), of Russian oil may be shut down from May due to either sanctions or buyer reluctance to purchase Russian goods.

According to Interfax, Russian oil production continued its slide in April. It fell by 7.5% in February, compared with March.

Kazuhiko Sako, chief analyst at Fujitomi Securities Co Ltd. stated that the oil market would likely continue to be bullish this week. However, there will be limited supply from oil producers to counter a lower flow from Russia.

According to the Wall Street Journal, “Soaring U.S. crude oil prices are also responsible for recent rallies as people began to expect that U.S. gasoline market will tighten due to increased demand from Europe.”

The Organization of the Petroleum Exporting Countries and its allies (OPEC+), which also includes Russia) have rebuffed Western requests to accelerate production under a previously agreed agreement to boost supplies.

OPEC reported last week that March’s output rose just 57,000 bpd at 28.56million bpd. This was in contrast to the 253,000 bpd increase allowed by the OPEC+ agreement.

Libya stopped oil production at El Feel on Sunday, adding to the pressure. Additionally, two Zueitina sources said that oil exports had been suspended following protesters demanding Abdulhamid al-Dbeibah’s resignation.

According to experts, U.S. oil output forecasts are now being revised upwards despite supply and labour constraints. This is because higher prices stimulate more drilling, and well completion activity.