EU leaders have reached an agreement to ban 90% of Russian crude by the end of 2022.
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Oil prices jumped after EU leaders reached an agreement late Monday to ban 90% of Russian crude by the end of the year.
During Asia time on Tuesday, US crude oil futures for July rose 2.81% to $118.29, while Brent Crude Oil Futures up 0.93% to $122.80. Contracts for August delivery also traded higher: US crude rose 2.84% to $115.42 and Brent rose 1.17% to $118.98 a barrel.
Agreement to resolve the stalemate after the original Hungary hold talks. Hungary is a major user of Russian oil and its leader, Viktor Orban, has had friendly relations with Russia. Vladimir Putin of Russia.
Charles Michel, president of the European Council, said the move would immediately affect 75% of Russia’s oil imports.
The embargo is part of the EU’s sixth round of sanctions against Russia since its invasion of Ukraine. Negotiations to impose an oil embargo have been underway since the beginning of the month.
According to a May 31 statement from Council of Europe.
The European Council added that in the event of a “sudden disruption of supply”, “urgent measures” would be put in place to ensure supply security.
European Commission President Ursula von der Leyen said at a news conference that temporary exception includes the remaining amount of Russian oil that has not been banned.
“We have agreed that the Council will return to this topic as soon as possible one way or another. So this is a topic that we will return to and where we will still have to continue, but this is a big step forward, what we did today,” she said, referring to the temporary waiver.
Von der Leyen explained that a temporary exemption was granted so that Hungary, along with Slovakia and the Czech Republic – all of which connect to the southern segment of the pipeline – have access that they cannot easily replace.
About 36% of EU oil imports come from Russia, a country that plays an important role in the global oil market.
The ban could exacerbate worries about an already tight energy market. Energy prices have skyrocketed over the past year, contributing to a hot inflationary environment in many countries.
Vivek Dhar, director of mining and energy commodities research at Commonwealth Bank of Australia, wrote in a note following the news.
“An extra ban on Russian Crude Oil delivered by shipment will tighten already strained supplies amid increased demand due to the start of the driving season in [the] United States,” wrote Avtar Sandu, senior commodity manager at the Philip Nova exchange.
Meanwhile, OPEC+ is expected to stick to its original plan of a modest increase of 432,000 bpd in July, Sandu added.
– CNBC’s Natasha Turak contributed to this report.
