Oil prices rose as traders closely watched the prospect of the EU agreeing to impose a ban on Russian oil imports.
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The European Union on Monday will continue to work to reach a deal to embargo Russia’s oil after efforts to do so on Sunday failed.
The talks were largely organized by Hungary, a major Russian oil user, and leader Viktor Orban has friendly relations with Russia. Vladimir Putin of Russia.
Budapest at the weekend signaled its support for the European Commission’s proposal to impose sanctions only on Russian oil brought into the EU by tankers, which would allow importers to Landlocked energy exporters such as Hungary, Slovakia and the Czech Republic continue to receive Russian oil via pipeline until an alternative is available. source can be found. However, the negotiations were held up by requests from Hungary for EU financing.
A spokesman for the European Commission, the EU’s executive body, declined to comment on the ongoing proposals.
About 36% of EU oil imports come from Russia, a country that plays an important role in the global oil market.
To be sure, Russia is the world’s third largest oil producerbehind the US and Saudi Arabia, and is the world’s largest crude oil exporter to the global market. It is also a major producer and exporter of natural gas.
Oil prices rose on Monday morning as market participants closely watched the prospect of the world’s largest trading bloc agreeing to impose a ban on Russian oil imports.
International standard Brent Crude oil futures traded 0.8% higher at $120.41 per barrel in London, while in the US West Texas Intermediate Futures traded 0.9% higher at $116.15.
Energy prices, which were already high at the start of the year, have skyrocketed since Putin launched the war against Ukraine in late February.
‘We simply had to do it’
The proposed sanctions on oil imports would be part of the EU’s sixth package of sanctions against Russia since it invaded Ukraine nearly 100 days ago.
The previous five rounds of measures included restricting access to capital markets, freezing the assets of Russia’s central bank, excluding Russian financial institutions from SWIFT, and banning imports of Russian coal and other commodities.
Negotiations on imposing an oil embargo have been underway since the start of the month, although no clear progress has been made since European Commission President Ursula von der Leyen said the Member States will ban all Russian oil from Europe.
“Today, we are addressing our dependence on Russian oil. And let’s be clear, it won’t be easy because some member states are heavily dependent on Russian oil, but we do. I simply have to do it,” von der Leyen told the European Parliament. May 4, prompting applause from legislators.
The EU’s von der Leyen said the bloc must address its dependence on Russian oil.
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It had been hoped the leaders could reach an agreement in time for Monday’s summit in Brussels, Belgium, to illustrate the bloc’s unity in the face of a power onslaught. Kremlin. Failure to reach any kind of deal could be heralded as a victory for Putin.
Ukrainian officials have repeatedly asserted that the EU imposes a complete embargo on Russian oil and gas, with energy importing countries continuing to boost Putin’s oil and gas revenues on a daily basis.
Analysis from the advocacy group Transport and Environment shows that Russia’s military might is being bolstered by the $285 million in oil money that European countries make every day.
Indeed, Russia’s oil and gas revenues are watched responsible for about 43% of the Kremlin’s federal budget from 2011 to 2020, highlighting how fossil fuels play a central role for the Russian government.
“As Russia is a major producer and exporter of crude oil and refined products, a sales embargo will cause significant financial damage,” said Tamas Varga of oil brokerage PVM.
“On the other hand, in the absence of certain additional retaliatory measures, the EU still financed Russia in the conflict. In the first three months of the war, the EU obtained $60 billion worth of energy. , is hardly a recipe for financial stress. for the aggressor,” Varga said.
“This is self-admitted by the EU. What is being seriously discussed is whether sanctions are the best way to punish Russia. [whether] imposing tariffs would be more effective,” he added.
