Oil price rises as EU cuts Russian imports

Oil prices have hit fresh two-month highs after European Union leaders agreed on a plan to block more than two-thirds of Russian oil imports.

Brent crude rose above $123 a barrel on Tuesday morning, after the deal was reached at a summit in Brussels.

Prices for oil and gas have soared in recent months, fuelled by the lifting of lockdowns and the Ukraine war.

Rising energy costs have put pressure on consumers and businesses in Europe now facing higher bills.

The war in Ukraine has pushed countries in the West to shun Russian energy supplies.

Russia currently supplies 27% of the EU's imported oil and 40% of its gas. The EU pays Russia around €400bn (£341bn) a year in return.

However, the deal, which followed weeks of wrangling, includes a temporary exemption for pipeline oil following opposition from Hungary.

Pledges by Poland and Germany to stop importing pipeline oil by the end of this year will raise coverage of the ban to 90% of Russian imports.

European Council chief Charles Michel said the deal cut off "a huge source of financing" for the Russian war machine.

It is part of a sixth package of sanctions approved at a summit in Brussels, which all 27 member states have had to agree on.

So far, no sanctions on Russian gas exports to the EU have been put in place, although plans to open a new gas pipeline from Russia to Germany have been frozen.

EU members spent hours struggling to resolve their differences over the ban on Russian oil imports.

Hungary, which imports 65% of its oil from Russia through pipelines, resisted the new round of sanctions.

The cost of living crisis being felt across Europe has not helped either. Sky-rocketing energy prices - among other things - have curtailed some EU countries' appetite for sanctions which could also hurt their own economies.

High energy and fuel prices are hitting households, motorists and businesses.

According to the AA, filling a typical 55-litre tank of a diesel now costs more than £100.