Crude futures soared Monday on the prospect of a European Union ban on Iranian oil imports and renewed optimism that European politicians are making headway in their efforts to contain the region's ongoing debt crisis.

At 1059 GMT, the front-month January Brent contract on London 's ICE futures exchange was $2.35, or 2.2%, higher at $108.75 a barrel.

The front-month January contract on the New York Mercantile Exchange was trading up $3.20, or 3.3%, at $99.97 per barrel.

European officials are preparing to meet this week to discuss a French-led effort to ban Iranian oil imports from the region.

"If they do push for a [EU] ban on Iranian crude it will have heavy consequences," said Olivier Jakob, managing director of Swiss consultancy Petromatrix. He added that a ban would make life difficult for European refineries which would likely have to pay a high premium to replace Iranian crude supplies.

The push for wider sanctions follows an International Atomic Energy Agency report published earlier this month which expressed increasing concerns over the Islamic Republic's attempt to build a nuclear weapon.

Ongoing political tensions in other oil producers in the Middle East and North Africa are also helping to underpin prices, analysts said.

Civil unrest continues in Yemen and Syria , while turmoil has returned to Egypt and sectarian tensions in major oil producer Saudi Arabia are also on the rise after four protesters were reported killed last week.

"Crude prices...would be much lower were it not for the substantial geopolitical risk premium in place due to instability in the MENA area," said JBC Energy in a note.

Meanwhile, prices gained further support Monday as investors threw off the pessimism that dominated the market last week, following the euro and equity markets higher.

The market got an early boost from reports that the International Monetary Fund was in talks to create a bailout structure for Italy , and managed to hold its gains even after the IMF denied that any such talks were in process.

Italian bond yields also eased from recent highs and the euro rebounded from the seven-week low hit last Friday.

At 1059 GMT, the ICE's gasoil contract for January delivery was up $12.00, or 1.3%, at $941.75 per metric ton, while Nymex gasoline for January delivery was 723 points, or 3%, higher at $2.5265 per gallon.

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