On Monday, crude prices surged as European Union nations considered joining the United States in a Russian oil embargo.
The Brent crude futures increased 3.47% or 3.78 points to $111.71 per barrel. The international benchmark followed a rise of 1.21% to $107.93 per barrel last Friday.
Similarly, US West Texas Intermediate crude contracts 4.05% or 4.07 points to $107.17 per barrel. WTI extended its previous jump of 1.67% to $104.70 per share.
The prices stepped up ahead of the series of summits between EU countries and US President Joe Biden this week.
The scheduled meetings aim to harden the West’s deterrents to Moscow over its invasion of Ukraine.
Previously, they already imposed an array of punishing sanctions against the aggressive country. This included freezing the assets of the Kremlin’s central bank.
There are four rounds of EU punitive actions given over the past three weeks. These punishments affected 685 Russians and Belarusians.
However, Moscow was not shaken by the initial punitive actions.
Baltic states, including Lithuania, push for the ban as the next logical step in line with this. Meanwhile, Germany went against acting too quickly, citing the high energy costs in Europe.
Moreover, the Kremlin has warned that EU sanctions on Russian oil could prompt it to close a gas pipeline to Europe.
The region relies heavily on Russia for 40.00% of its gas, with Berlin most dependent.
Similarly, Bulgaria is entirely dependent on gas supplies from Russia’s Gazprom. The Balkan nation said it might seek an opt-out.
Russian LUKOIL accounts for 60.00% of the fuel used in the country.
Regardless, All EU sanctions decisions require a majority vote. So France, who heads the union’s six-month presidency, will likely prove crucial.
Crude rises as the oil market remains tight
Furthermore, the Organization of the Petroleum Exporting Countries and allies reported that some members fell short of their supply quotas.
Correspondingly, OPEC+ missed its production target by more than 1.00 million barrels per day in February 2022.
Then, top producers Saudi Arabia and the United Arab Emirates resisted calls to step up production faster.
In addition, US energy companies also grappled to keep the number of active oil rigs up, despite high prices.
In line with this, the International Energy Agency outlined ways to reduce crude use by 2.70 million bpd within four months.
It called individuals to use car-pooling, lower speed limits, and cheaper public transport.
These ways would help offset the estimated loss of 3.00 million bpd of Russian crude and products by April.
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