Oil prices are soaring today, due to the announcement of the European Union that it will proceed to imposing an embargo to the black gold exported by Russia, due to the war in Ukraine, which will increase the problems and tensions on the supply side.
The reference contract for the barrel Brent North Sea for delivery in July increased by 4.92% and closed at $ 110.14 a barrel, the highest level of the last 2.5 weeks. West Texas Intermediate (WTI) delivery in June rose 5.27% to close at $ 107.81.
For Andy Lipau of Lipow Oil Associatesthe rise in prices is due to “in the reduction of US stocks“Petroleum products, but above all because of”of the EU decision to impose an embargo on Russian oil».
The European Commission distributed its proposal to 27 on Tuesday night for the sixth package of sanctions against Moscow. It included the complete cessation of imports of Russian crude (in six months) and refined products (by the end of 2022).
Several member states yesterday expressed the “worryFor their proposal, trusted the French Agency European diplomat.
Although it was offered an exemption, as in Slovakia, Hungary rejected the proposalstressing that he can not support it “in its current formAs stated by the Hungarian Foreign Minister, Peter Sigiarto.
«As unanimity is required (to adopt the Commission proposal), its final form is likely to be very lenient, given Hungary’s current position“, Assessed in a note o Bjornar Tonhaugen, analyst at Rystad Energy.
Market participants are equally concerned about another aspect of the plan, which provides for ban on European ships carrying crude or refined products from Russia. «Sanctions on ships will be much heavier on Russian exports“, Warns Andy Lipau.
Because the measure goes far beyond cargo deliveries to the EU, it accounts for much of Russia’s oil exports to any destination, including Asia, which is guaranteed by European tankers.
For Mr. Lipau, prices are also rising due to the significant decline in US crude stock. Stocks could shrink even further by the end of May, he warns, as several US refineries are carrying out maintenance work.
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