Oil surges on growing supply fears as EU considers Russian ban
BNN Bloomberg
Oil rose for a third day as the war in Ukraine neared the one-month mark without a conclusion in sight, exacerbating supply concerns over the loss of Russian crude.
Oil rose for a third day as the war in Ukraine neared the one-month mark without a conclusion in sight, exacerbating supply concerns over the loss of Russian crude.
Futures in New York rose 7.1 per cent to settle above US$112 a barrel on Monday. Several European Union countries are pushing for a fifth round of sanctions on Russia, though some remain opposed to including oil in those measures. The Kremlin said an EU ban on oil imports from Russia would have a profound effect on the global crude market and hit the continent the hardest.
In weeks prior, the EU sanctioning Russian oil “seemed unrealistic given their reliance on Russian energy supply,” said Rohan Reddy, a research analyst at Global X Management, a firm that manages US$2 billion in energy-related assets. “It would basically shave off a full 4-5 per cent of global oil supply.”
The global oil market has been thrown into turmoil by Russia’s invasion of Ukraine, with the U.S. and Europe imposing sanctions on Moscow and crude buyers shunning the country’s cargoes. Brent neared US$140 a barrel earlier this month to hit the highest since 2008, before seeing a massive pullback that briefly put the market into bear territory. Prices have experienced unprecedented volatility, with frequent intraday swings of about US$10 and broader commodity markets seizing up amid a widespread liquidity crunch.
The rally in oil prices has spurred importing nations to pressure other producers to step up supply, including members of the Organization of Petroleum Exporting Countries. Saudi Arabia said it can not be held responsible for any drop in oil output if it doesn’t get more help to deter attacks from Yemen. Houthi rebels attacked at least six sites across Saudi Arabia over the weekend, including some run by Aramco. Saudi Arabia has been facing calls from oil-consuming nations such as the U.S. to increase supply output.
