Brent Jumps to $110 as EU Bans Russian Oil

By Adedapo Adesanya

Brent crude soared to $110.18 per barrel on Wednesday after rising by 5.21 or 4.96 per cent as details on the plans by the European Union (EU) to ban Russian oil were revealed.

Also, the West Texas Intermediate (WTI) crude increased by $5.32 or 5.19 per cent to $107.73 per barrel as the market responded to the development.

In one month, the European Commission proposes to ban all shipping, brokerage, insurance and financing servers related to the import and transport of Russian oil.

European Commission President, Mrs Ursula von der Leyen said on Wednesday that the embargo “will be a complete import ban on Russian oil, seaborne and pipeline, crude and refined”, that will take place in stages to give states time to find alternative energy sources.”

However, in order for the proposal to be approved, it will need the support of all member states. Some countries within the 27-member bloc have expressed their opposition to an all-out embargo.

Under the proposal, heavy Russian dependents like Hungary and Slovakia could be granted a longer period to adapt to the embargo, until the end of 2023.

The ban would apply to Russian exports of oil worldwide, potentially affecting Moscow’s ability to find alternative buyers after the EU stops buying Russian oil.

If this is agreed, the embargo would follow the United States and the United Kingdom, which have already imposed bans in an attempt to cut one of the largest income streams for the Russian economy.

Ambassadors from the EU’s 27 governments are widely expected to adopt the proposal as early as this week, allowing it to become law soon after.

On its part, Russia could offset the loss of one of its primary customers by selling oil to other importers including India and China, which have not stopped buying from it.

This outweighed news that crude inventories in the US rose modestly last week.

According to the US Energy Information Administration (EIA) stocks were up 1.2 million barrels as the world’s largest producer released more barrels from its strategic reserves.

The market is expected to become tighter as the Organisation of Petroleum Exporting Countries and allied producers, OPEC+ is expected to stick to its plan for a gradual ramp-up of monthly production.

The group will meet on Thursday, May 5.