- Oil prices rallied early on Monday amid EU consultations about potentially joining the U.S. in banning imports of Russian oil.
- WTI Crude was up 3.87% at $108.91 and Brent Crude was trading up 3.93% at $112.30.
- France sees a potential ban on imports of Russian energy into the EU as an option.
WTI Crude was trading at $108.91, up 3.87%, and Brent Crude was at $112.30, up 3.93% as reported by Oil Price.
Separately, prices rose after an attack by Iran-aligned Houthi rebels on energy installations in Saudi Arabia, the world’s top oil supplier and de facto leader of OPEC, over the weekend.
Drone strikes targeted a distribution centre for refined oil products in Jizan, a refinery in the Red Sea port of Yanbu, and a natural gas plant, according to the Saudi energy ministry.
Several European Union countries, like Ireland and Lithuania, feel the European Union impose tougher sanctions on Russia, including on its energy industry. EU ministers will meet for a week to determine whether and how to ratchet up sanctions against Russia in response to its invasion of Ukraine.
France’s Economy and Finance Minister Bruno Le Maire stated over the weekend that a prospective embargo on Russian energy imports into the EU is an option, adding that sanctions are harming Russia and Vladimir Putin.
“Should we cease buying Russian oil right away, and should we stop importing Russian gas a little later?” In an interview with LCI television on Sunday, the French minister said, “The president has never ruled out these alternatives.”
However, considering that Europe relies on Russia for more than one-fourth of its oil supply and one-third of its natural gas supply, the European Union and its largest economy, Germany, have been hesitant to block Russian energy imports or impose penalties on Russian oil and gas exports.
Tight global supplies
Oil “rose to a one-week high in Asia as the war in Ukraine keeps global supplies very tight, with traders, mostly through self-sanctioning, avoiding Russian crude, which is currently being offered close to $30 below Brent with a limited number of buyers queuing up to secure cheap cargoes,” according to a note published by Saxo Bank’s strategy team on Monday.
“With supply tightening, the market will be searching for evidence of demand destruction, mostly through the cost of diesel and gasoline, as well as the impact of temporary covid-related lockdowns in China,” according to the bank’s strategists.
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Source: Oil Price