Brent nears $120 as US, EU set to discuss Russian oil ban

Brent nears $120 as US, EU set to discuss Russian oil ban

Crude oil prices surged around 4 percent as Brent reached $120 on Wednesday due to supply concerns stemming from expected sanctions on Russian oil.

As of 1310 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $4.49 (+3.89 percent) to reach 119.97 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, jumped to $113.40 a barrel, up by $4.13 (+3.78 percent).

The price for Opec basket was recorded at $114.60 a barrel with an increase of 0.69 percent. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.

Arab Light was available at $114.41 a barrel with a decrease of 2.95 percent and the price of Russian Sokol jumped to $101.64 a barrel with a 4.37 percent increase.

Read More: Crude oil prices hit highest levels since 2008

The European Union members will discuss a possible oil embargo on Russian crude on Thursday (March 24) in response to Moscow’s military offensive in Ukraine, but are divided about imposing a ban due to the heavy reliance of some countries, namely Germany and Hungary, on Russia’s oil. A decision on a ban requires the approval of all 27-member states of the EU. US President Joe Biden is set to announce more Russian sanctions when he meets with European leaders on Thursday in Brussels, including an emergency meeting of NATO.

Moreover, Russian and Kazakhstan oil exports via the Caspian Pipeline Consortium from the Black Sea may fall by up to 1 million barrels per day because of storm-damaged berths. 

Plunging crude stockpiles in the United States, the world’s biggest oil consumer, also added to the apprehensions around supply. The latest data from the American Petroleum Institute industry group showed US crude stocks fell by 4.3 million barrels for the week ended March 18.

Earlier, the Saudi-led military coalition on Sunday said Yemen’s Iran-backed Houthi rebels had launched attacks on energy units, including an Aramco liquefied gas plant in the Red Sea port of Yanbu, an oil storage plant in Jeddah, an Aramco oil terminal in the southern border town of Jizan, as well as on the installations of Yanbu Aramco Sinopec Refining Company.

The kingdom’s Energy Ministry said there was a temporary drop in output at the Yanbu refinery, which produces 400,000 barrels of oil a day. The kingdom said it will not bear any responsibility for shortages in crude supplies to global markets following the attacks on its energy infrastructure.

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