Oil prices rose as traders closely watched the possibility of the European Union agreeing to a ban on Russian oil imports.
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The European Union will continue on Monday to work towards a deal to ban Russian oil after attempts to do so failed on Sunday.
The talks were largely postponed by Hungary, a major user of Russian oil and whose leader Viktor Orban was on friendly terms with Vladimir Putin Russia.
Budapest over the weekend signaled its support for the European Commission’s proposal to impose sanctions only on Russian oil brought by tankers into the EU, which would allow landlocked energy importers Hungary, Slovakia and the Czech Republic to continue receiving their Russian oil via pipeline until the alternative. Sources can be found. But the talks have been bogged down by Hungary’s demands for EU funding.
A spokesman for the European Commission, the EU’s executive arm, declined to comment on the ongoing proposals.
Roughly 36% of the EU’s oil imports come from Russia, a country that plays a large role in global oil markets.
Of course, Russia is too The third largest oil producer in the worldIt is behind the United States and Saudi Arabia and is the world’s largest exporter of crude to global markets. It is also a major producer and exporter of natural gas.
Oil prices rose on Monday morning as market participants closely watched the possibility of the world’s largest trading bloc agreeing to a ban on Russian oil imports.
international standard Brent Crude futures rose 0.8% to $120.41 a barrel in London, while US contracts rose West Texas Middle Futures were trading 0.9% higher at $116.15.
Energy prices, already high at the beginning of this year, have risen since Putin launched war against Ukraine in late February.
“We simply have to do it”
The proposed sanctions on oil imports would be part of the sixth EU sanctions package 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 the Russian Central Bank, excluding Russian financial institutions from the SWIFT system, and banning imports of Russian coal and other goods, among others.
Talks to impose an oil embargo have been underway since the beginning of the month, although there has been no tangible progress since European Commission President Ursula von der Leyen said member states would 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 very dependent on Russian oil, but we simply have to do it,” von der Leyen told the European Parliament. May 4, sparking applause from lawmakers.
The EU’s von der Leyen said the bloc must address its dependence on Russian oil.
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It was hoped that the leaders would reach an agreement in time to hold their summit on Monday and Tuesday in Brussels, Belgium, to demonstrate the bloc’s unity in response to the Kremlin attack. The failure to secure any kind of deal is likely to be heralded as a victory for Putin.
Ukrainian officials have repeatedly insisted that the European Union impose a blanket ban on Russian oil and gas, with energy importing nations continuing to bolster Putin’s war fund with oil and gas revenues on a daily basis.
Analytics From the Transportation and Environment campaign group, it appears that Russia’s military might is enhanced by the $285 million in oil payments that European countries pay daily.
In fact, Russian oil and gas revenues were I have seen to be responsible for roughly 43% of the Kremlin’s federal budget between 2011 and 2020, highlighting how fossil fuels play a central role for the Russian government.
“Given that Russia is a major producer and exporter of crude oil and refined products, a ban on sales would cause significant financial damage,” said Tamas Varga of BVM oil brokerage.
“On the other hand, in the absence of additional resolute retaliatory measures, the European Union continues to fund Russia in the conflict. In the first three months of the war, it obtained $60 billion worth of energy, which is hardly a recipe for causing financial stress,” Varga said.
“This is what the EU recognizes. What is under serious debate is whether sanctions are the best way to punish Russia or not.” [whether] “Imposing fees will be more effective,” he added.