SINGAPORE (Reuters). Oil prices surged on Tuesday following EU’s agreement to reduce Russian oil imports by 2022. The move fuelled fears about a tighter supply market amid growing demand and heightened U.S. peak summer driving season.

Futures for July which ends on Tuesday gained 33c to $122 per barrel at 0054 GMT. Up 33 cents, the August contract was $117.93.

U.S. West Texas Intermediate oil futures traded at $117.31/barrel, an increase of $2.24 over Friday’s close. Due to the U.S. holiday, there was no settlement Monday.

Leaders of the European Union agreed to reduce oil imports from Russia to 90% by 2022. This was in principle after a stalemate with Hungary regarding the most severe sanctions imposed on Moscow since March’s invasion of Ukraine.

Some experts believe that oil prices may not rise as much because the market has already priced in supply limitations.

Almost all EU members were onboard with the ban. This suggests that the market is “already pricing EU self-sanction” and there was significantly less Russian oil coming to Europe in this year’s forecast, Stephen Innes (Managing Partner at SPI Asset Management) told Reuters.

Innes said, “I think that the market is pricing more Asia-related demand via China. But the most glaring concern are the rocketing petrol prices at home which could cause some driving season demand destruction.”

After the COVID-19 curbs being eased, China’s demand is likely to rise. Shanghai announced that the two-month-long lockdown has been lifted and most people living in China’s biggest city will be able to drive to work starting Wednesday.

OPEC+ will stick to its last-year’s agreement on the production side at its Thursday meeting. Six OPEC+ sources stated that a small July output increase of 432,000 barrels per daily was planned. This is in response to Western demands for a quicker rise to less surging prices.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, maintain that the market for oil is stable and recent price increases are not due to fundamentals.

The oil prices have shot up to the highest level in more than a decade on both sides Atlantic in 2022. They are also higher by 55% in this year’s first quarter.