Oil prices rose sharply on Wednesday after the European Union (EU) unveiled a plan to phase out Russian oil, triggering concerns over tight supplies.

The West Texas Intermediate (WTI) for June delivery added 5.4 U.S. dollars, or 5.3 percent, to settle at 107.81 dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery increased 5.17 dollars, or 4.9 percent, to close at 110.14 dollars a barrel on the London ICE Futures Exchange.

European Commission President Ursula von der Leyen said Wednesday that the EU will phase out Russian supply of crude oil within six months and refined products by the end of the year. The plan is part of a sixth package of sanctions targeting Moscow over its military operation in Ukraine.

EU countries imported on average 3.5 million barrels of crude oil and oil products per day from Russia in the fourth quarter of 2021, said Carsten Fritsch, energy analyst at Commerzbank Research, citing data from the International Energy Agency.

"This quantity now has to be sourced elsewhere on the market, which is likely to tighten supply if all other things remain equal and should in turn push up prices," he added.