Oil prices rose sharply ahead of the periodic meeting of the Organisation of Petroleum Exporting Countries (OPEC) and its allies.
Brent crude futures, the global oil benchmark, climbed 3.35 percent to $108.25 a barrel at 10.20 GMT+1, the first time since April 29.
West Texas Intermediate crude futures also witnessed a corresponding increase of over 3 percent to $105.7 a barrel.
The development was on the heels of the European Union’s plans to phase out imports of Russian oil as part of sanctions for Russia’s invasion of Ukraine.
According to Eurostat, Russia is the leading supplier of natural gas, oil and coal to the EU, purchasing 24.4 percent of its energy needs from Russia in 2020.
As part of the sixth package of sanctions against Russia over its invasion of Ukraine, the European Commission (EC) has proposed a complete ban on Russian oil imports, by any means, in a move designed to come into force within the end of 2022, to give EU member states time to phase out purchases, European Commission President Ursula von der Leyen said at the European Parliament on Wednesday.
“Let us be clear: it will not be easy. Some Member States are strongly dependent on Russian oil. But we simply have to work on it. We now propose a ban on Russian oil. This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined.
“We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets. This is why we will phase out Russian supply of crude oil within six months and refined products by the end of the year.
“Thus, we maximise pressure on Russia, while at the same time minimising collateral damage to us and our partners around the globe”, von der Leyen said.
The new sanctions package includes kicking Sberbank, Russia’s largest bank, and two other major banks, out of SWIFT, as well as banning three big Russian state-owned broadcasters from EU airwaves, as “Putin must pay a high price for his brutal aggression”, von der Leyen said.
In recent days, reports had said that the EU could be considering exemptions from an oil embargo for countries like Hungary and Slovakia, who are highly dependent on Russian oil and Hungary has even hinted at a veto on a Russian oil ban.
The ban on Russian oil is expected to have a ripple effect on the EU’s energy supply chain.
Already, the United States placed a ban on Russian oil imports, and the UK said it would follow suit by the end of the year.
In March, Timipre Sylva, Minister of State for Petroleum Resources, said Nigeria was ready to offer its services as an alternative gas supplier to Europe.
On Thursday, OPEC and its allies will meet to determine the production quota for June.
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