Oil prices rose as traders closely followed the prospect of the EU agreeing to impose a ban on Russian oil imports.
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On Monday, the European Union will continue to work to reach an agreement to seize Russian oil after attempts to do so on Sunday failed.
The talks are largely stopped by Hungary, a major Russian oil user and whose leader, Viktor Orban, has been on friendly terms with Russian Vladimir Putin.
Budapest over the weekend expressed support for a European Commission proposal to impose sanctions only on Russian oil introduced into the EU by tankers, which would allow offshore energy importers Hungary, Slovakia and the Czech Republic to continue receiving its Russian oil through a gas pipeline to an alternative. sources can be found. However, talks were interrupted by Hungary’s demands for EU funding.
A spokesman for the European Commission, the EU’s executive arm, declined to comment on ongoing proposals.
About 36% of EU oil imports come from Russia, a country that plays a disproportionate role in world oil markets.
Russia is arguably the world’s third largest oil producer, behind the United States and Saudi Arabia, and the world’s largest exporter of crude oil to global markets. It is also a major producer and exporter of natural gas.
Oil prices rose on Monday morning as market participants closely followed the prospect of the world’s largest trading bloc agreeing to impose a ban on Russian oil imports.
International benchmark Brent crude futures rose 0.8% to $ 120.41 a barrel in London, while U.S. West Texas Intermediate futures traded up 0.9% at $ 116.15.
Energy prices, already high earlier this year, have skyrocketed since Putin launched the war on Ukraine in late February.
“We just have to do it”
The proposed sanctions on oil imports would be part of the sixth package of EU sanctions on Russia since it invaded Ukraine almost 100 days ago.
The previous five rounds of measures have included restricted access to capital markets, a freeze on Russia’s central bank assets, the exclusion of Russian financial institutions from SWIFT and a ban on imports of Russian coal and other commodities. , others.
Talks to impose an oil embargo have been underway since the beginning of the month, although no tangible progress has been made since European Commission President Ursula von der Leyen said member states would ban everything the Russian oil of Europe.
“Today we are addressing our dependence on Russian oil. And let’s be clear, it will not be easy because some Member States depend heavily on Russian oil, but we just have to do it,” von der Leyen told the European Parliament on May 4, provoking applause from legislators.
EU Von der Leyen has said the bloc must address its dependence on Russian oil.
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Leaders were expected to reach an agreement in time for their Monday-Tuesday summit in Brussels, Belgium, to illustrate the unity of the bloc in response to the Kremlin attack. Failure to reach an agreement would probably be heralded as a victory for Putin.
Ukrainian officials have repeatedly insisted that the EU impose a full embargo on Russian oil and gas, and energy-importing countries continue to fill Putin’s war chest with daily oil and gas revenues.
The analysis of the Transport and Environment campaign group shows that Russia’s military power is being strengthened by $ 285 million in oil payments made daily by European countries.
In fact, Russian oil and gas revenues were thought to be responsible for about 43% of the Kremlin’s federal budget between 2011 and 2020, which shows how fossil fuels play a central role for the government. rus.
“Given that Russia is a major producer and exporter of crude oil and refined products, a embargo on sales would cause significant financial pain,” said Tamas Varga of PVM oil brokerage.
“On the other hand, in the absence of strong additional retaliatory measures, the EU is still financing Russia in the conflict. During the first three months of the war, it acquired energy worth $ 60 billion, barely a revenue for causing financial tensions. for the invader, “Varga said.
“The EU admits this. What is being seriously discussed is whether sanctions are the best way to punish Russia or [whether] imposing tariffs would be more effective, “he added.