This reinforcement of sanctions will be proposed by Brussels to the 27.
Oil prices faltered on Tuesday, oscillating between red and green, as the European Union discusses new sanctions against Moscow after the Commission proposed to the 27 to halt their purchases of Russian coal, but without deciding on gold black at this point. At about 3:40 PM GMT (5:40 PM in Paris), a barrel of Brent from the North Sea for delivery in June lost 0.46% to $107.03. A barrel of US West Texas Intermediate (WTI) for delivery in May rose 0.51% to $102.75.
The European Commission on Tuesday proposed to the EU’s 27 member states to tighten sanctions against Moscow by halting their purchases of Russian coal, which represents 45% of EU imports, and by closing European ports to Russian coal. ships or operated by Russians. These talks follow the discovery in Ukraine of massacres attributed to Russian troops near Kiev, most notably in Boutcha. †We are working on additional sanctions, including on oil imports‘ said Ursula von der Leyen.
Energy sanctions increasingly likely
The Brussels proposals will be discussed on Wednesday by representatives of the 27 member states, before a meeting of European foreign ministers next Monday. Sanctions require unanimity. For the time being, oil is not directly mentioned, even though this hypothesis seems to be gaining ground.
According to Bjarne Schieldrop, an analyst at SEB, the US announcement last week is to wind down its strategic crude oil reserves.”can be used as a tool to implement similarly explicit oil sanctions against Russia without driving up the oil price†
President Joe Biden announced Thursday that he would extract a million barrels a day from the United States’ immense strategic oil reserves for six months, an unprecedented rate. †This opens up the possibility of explicit oil sanctions against Russia, on the order of a million barrels per day. (…) Energy sanctions are therefore becoming increasingly likely‘ the analyst continues. †Ban on Russian energy imports must make a difference», estimates Ipek Ozkardeskaya, from Swissquote.
Especially since even the European countries most dependent on Russian energy exports are considering these sanctions. †Europe’s (particularly Germany’s) susceptibility to refraining from importing Russian gas has increased stakes and should keep energy prices high“says Stephen Innes, Analyst at Spi Asset Management. Russian imports provide Europe with 40% of its natural gas needs and 30% for oil.
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