Oil soars again with new sanctions against Russia on the market’s radar

Oil prices rose again on the international market this Sunday (6th), after the US government confirmed that it is discussing with European countries the ban on importing oil from Russia, in response to the invasion of Ukraine.

Bloomberg data show that the barrel of Brent oil reached a maximum of US$ 139.13 (R$ 706.11) on Sunday night in Brazil, with the reopening of markets in Asia. The rise reflects investor fears over the war’s potential economic impacts.

At 10:53 pm, the commodity was up 8.5%, quoted at US$ 128.13 (R$ 650.28).

In a week that promises to continue under intense volatility in the markets due to the conflicts in Europe, the main Asian stock exchanges operated in a strong fall in the first trading session of the week.

The Tokyo Stock Exchange was down about 3.75%, while shares in Hong Hong were down by an average of 4.18% around 11:05 pm ET. European stock index futures pointed to losses of 3.4%.

The euro hit its lowest level against the dollar in 22 months in the Asian market on fears that stagflation could hit Europe. The currency has dropped more than 4% since Russia started what it calls a “special military operation” in Ukraine and is approaching the value it reached at the beginning of the pandemic.

On Sunday afternoon, Secretary of State Anthony Blinken said the United States was “seriously engaged” in a discussion with the European Union over the possibility of banning Russian oil imports.

The Biden administration is under pressure from US lawmakers to take this further step in response to Russian attacks on Ukrainian cities and people.

“We are in very active discussions with our European partners about banning Russian oil imports into our countries, while, of course, maintaining a stable global supply of oil,” Blinken said in an interview with NBC.

The price of oil has already skyrocketed by more than 20% in the last week alone, due to conflicts in Eastern Europe, which reduced supplies from Russia, one of the main global producers of the raw material.

In an interview with CNN also this Sunday, European Commission President Ursula von der Leyen was more reticent about the proposal to cut imports.

Before making it impossible for Putin to finance his wars, he said, the European Union should “get rid of its dependence on Russian fossil fuels”.

German foreign and finance ministers spoke out on Sunday against the ban on imports of gas, oil and coal from Russia.

“You have to be able to maintain (sanctions) over time,” German diplomacy chief Annalena Baerbock explained to the ARD network. “Sanctions will be useless if in three weeks we find that we only have a few days of electricity in Germany and that sanctions must be reversed.”

“We are willing to pay a very, very high economic price,” but “if tomorrow in Germany or Europe the lights go out, that will not stop the tanks,” Baerbock added in an interview with the ZDF network.

Ukrainian officials and residents are calling on Western countries to sanction Russian exports of hydrocarbons in response to the invasion of their country.

But German Finance Minister Christian Lindner was also skeptical.

“We must not limit our ability to resist in the long term” and an embargo on Russian hydrocarbons “would have a negative impact on that capacity,” Lindner told Bild newspaper.

Germany imports 55% of its gas and 42% of its oil and coal from Russia, a dependence on which the government was self-critical after the Ukraine invasion, but which will take years to subside.

The new G7 sanctions against Russia should “especially touch the oligarchs” who enriched themselves with Russian President Vladimir Putin, the German finance minister told the ARD network.

The G7 countries announced in a statement on Friday their intention to impose “severe new sanctions” against Moscow “in response to Russian aggression” against Ukraine.