Oil prices gained on Monday after the European Union announced to impose sanctions on Iranian oil, spurring fresh supply concerns.

Foreign Ministers of the European Union (EU) countries on Monday decided to ban the oil and oil products from Iran. Although the embargo will be started from July 1, which intended to allow major EU importers like Greece, Italy and Spain to find alternative suppliers, investors were still worried about the security of global oil supply as Iranian authorities have threatened to close the Strait of Hormuz, a key shipping lane for the oil trade, and disrupt oil supplies in retaliation against the ban.

According to the Paris-based International Energy Agency (IEA), the European Union imported about 600,000 barrels of oil a day from Iran, close to a quarter of Iran's exports of 2.6 million barrels a day.

As of Monday's close, Light, sweet crude for March delivery gained 1.25 dollars, or 1.3 percent to settle at 99.58 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for March delivery also rose and last traded above 110 dollars a barrel.