Global crude oil prices have surged to a two-month high of over $122 per barrel after European Union leaders agreed to pursue a ban that would halt the imports of most Russian oil.
Global crude oil prices have surged to a two-month high of over $122 per barrel after European Union leaders agreed to pursue a ban that would halt the imports of most Russian oil. The moveis designed to hit the country’s coffers and pave the way for a sixth package of sanctions to punish it and President Vladimir Putin for the invasion of Ukraine.
Global benchmark Brent topped $122 a barrel, hitting a two-month high after EU’s latest push followed bans by the US and UK on Russian exports. This would immediately cover more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine. The aim is to exert maximum pressure on Russia to end the war
The sanctions are expected to immediately hit 75% of Russian oil imports. However, Europe’s avoidance of the country’s supplies is forcing barrels on longer routes to willing buyers in Asia, with India the biggest market for crude from western Russia.
India’s seaborne crude oil imports have surpassed 4.8 million barrels per day in April. Russian-origin crudes hit 5% of India’s total seaborne imports in April for the first time, rising from under 1% throughout 2021 and Q1 2022.
Domestic crude oil production has been declining since the financial year 2014-15, dropping to just 28.4 million tonnes in FY22. The production in 2021-22 represented a decline of 11.8 per cent from 32.2 MT, increasing the economy’s vulnerability due to skyrocketing global oil prices.
Oil headed for the longest run of monthly gains in more than a decade on the EU’s move that was reached during a leaders’ summit in Brussels. Members overcame objections from Hungary, which had been blocking an embargo as it sought assurances its energy supplies wouldn’t be disrupted.
The EU sanctions would forbid the purchase of crude oil and petroleum products from Russia delivered to member states by sea but include a temporary exemption for pipeline crude. EU Officials and diplomats still have to agree on the technical details and the sanctions must be formally adopted by all 27 nations.
Russia “bets on chaos" by making energy prices skyrocket and nudging Europeans to protest their governments, Volodymyr Zelenskiy said in a video address to the European Council where he urged officials to adopt the sixth sanctions package, which would include restrictions on Russian oil.
After cutting gas supplies to Poland, Bulgaria and Finland, Russia has now warned it will halt pipeline shipments to a Dutch energy firm. GasTerra will stop receiving supplies from Gazprom on Tuesday after refusing to accept new payment terms imposed by Russia including opening a rubles account with Gazprombank.
The operator of Russia’s Sakhalin-2 liquefied natural gas plant stopped supplying the fuel to a former Gazprom PJSC trading unit seized by Germany, according to people with knowledge of the matter.
Crude oil futures continued to climb in mid-morning Asian trade May 31, adding to gains of more than $2/b for ICE Brent crude overnight after the EU reached an agreement to ban Russian oil imports.
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